Axis Bank Annual Report-2012 by vasantmn

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									CONTENTS

Managing Director & CEO’s Letter to Shareholders         3

Board of Directors                                       4

Snap Shot of Key Financial Indicators : 2008-2012        5

Highlights                                               6

Directors’ Report                                        7

Management’s Discussion & Analysis                      17

Auditors’ Report                                        31

Balance Sheet                                           32

Profit and Loss Account                                 33

Cash Flow Statement                                     34

Schedules Forming Part of Balance Sheet                 36

Schedules Forming Part of Profit and Loss Account       42

Significant Accounting Policies                         43

Notes to Accounts                                       51

Auditors’ Certificate on Corporate Governance           86

Corporate Governance                                    87

Auditors’ Report on Consolidated Financial Statements   109

Consolidated Financial Statements                       110

Disclosures under the New Capital Adequacy Framework    151
(Basel II Guidelines)

Bank’s Network : List of Centres                        169




                                                              1
MANAGING DIRECTOR & CEO’S LETTER
TO THE SHAREHOLDERS

I am delighted to report that your Bank has delivered another year of consistent growth in business
volumes, revenues and profits during a period of slower GDP growth, tight liquidity and relatively high
interest rates. The Bank has built its business upon the trust of millions of customers who avail of its
products and services through a distribution network of 1,622 branches and 9,924 ATMs spread across
1,050 centres in the country.

The retail deposit base continues to be the cornerstone of the growth strategy of the Bank and it has
performed well in a challenging environment, reflecting the quality of our customer franchise. I am also
happy to report that the Bank’s assets are healthy and growing satisfactorily. It remains the endeavor
of your Bank to offer a full suite of high quality products and services to our customers to meet their
evolving financial needs.

The Bank continues to balance growth with profitability and this is evidenced in the healthy return on
assets and return on equity reported for the year. I am happy to report that your Bank’s performance
has been acclaimed, both in the country as well as overseas, the recent Bank of the Year: India 2011
award from the Banker magazine, UK being one such acknowledgement.

Looking ahead, I have strong conviction in the secular growth opportunity that our country presents,
notwithstanding mid-course adjustments in the near term. Your Bank is well-positioned not just to
cope with the near-term headwinds, but also to capture the medium to long term prospects. I take this
opportunity to express our deep appreciation of your support and association with the Bank and also to
convey that we remain committed to delivering value to all our stakeholders.



Shikha Sharma
27th April, 2012




                                                                                                     3
BOARD OF DIRECTORS*
Adarsh Kishore                                                                                                 Chairman
Shikha Sharma                                                                                 Managing Director and CEO
Rama Bijapurkar                                                                                                  Director
K. N. Prithviraj                                                                                                 Director
V. R. Kaundinya                                                                                                  Director
S. B. Mathur                                                                                                     Director
Prasad R. Menon                                                                                                  Director
R. N. Bhattacharyya                                                                                              Director
Samir K. Barua                                                                                                   Director
A. K. Dasgupta                                                                                                   Director
Som Mittal                                                                                                       Director

P. J. Oza                                                                                               Company Secretary

THE CORE MANAGEMENT TEAM*
V. Srinivasan                                                                       Executive Director (Corporate Banking)
Somnath Sengupta                                                                                Executive Director and CFO
Snehomoy Bhattacharya                                                                Executive Director (Human Resources)
R. K. Bammi                                                                              Executive Director (Retail Banking)
P. Mukherjee                                                                  President - Treasury & International Banking
S. S. Bajaj                                                                               President & Chief Audit Executive
Vinod George                                                                    President - Wholesale Banking Operations
M. V. Subramanian                                                                   President - Rural and Inclusive Banking
S. K. Mitra                                                                                          President - Distribution
B. Gopalakrishnan                                                                                            President - Law
Bapi Munshi                                                                                   President & Chief Risk Officer
C. Babu Joseph                                                            Executive Trustee & CEO - Axis Bank Foundation
Sanjeev K. Gupta                                                    President - Finance & Accounts and Investor Relations
V. K. Bajaj                                                                                      President - Mid Corporates
Sidharth Rath                                                                            President - Infrastructure Business
A. R. Gokulakrishnan                                                                             President - Stressed Assets
Rajendra D. Adsul                                                                                            President - SME
R. V. S. Sridhar                                                                 President (IT & Retail Banking Operations)
Lalit Chawla                                                                                   President - Corporate Credit
Rajesh Kumar Dahiya                                                                           President - Human Resources
Nilesh Shah                                                                                 President - Investment Banking
*as on 27 April 2012
M/s Deloitte Haskins & Sells                                                                                       Auditors
Chartered Accountants
M/s Karvy Computershare Private Limited                                                Registrar and Share Transfer Agent
UNIT : AXIS BANK LIMITED
Plot No. 17 to 24, Vithalrao Nagar, Madhapur, Hyderabad - 500 081
Tel. No. : 040-23420815 to 23420824 Fax No. : 040-23420814
Email: einward.ris@karvy.com
Registered Office :
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad - 380 006.
Tel. No. : 079-2640 9322 Fax No : 079-2640 9321 Email : p.oza@axisbank.com, rajendra.swaminarayan@axisbank.com
Web site : www.axisbank.com
Corporate Office :
Axis House, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai - 400 025
Tel. No. : 022-24252525/43252525 and Fax No. : 022-43251800



 4
SNAP SHOT OF KEY FINANCIAL INDICATORS : 2008 - 2012

                                                                                                        (` in crores)

FINANCIAL HIGHLIGHTS                2007 - 2008 2008 - 2009 2009 - 2010     2010 - 2011   2011 - 2012      CAGR
                                                                                                        (5 Years)

Total Deposits                        87,626.22   117,374.11   141,300.22   189,237.80    220,104.30      30.22%

     - Saving Bank Deposits           19,982.41    25,822.12    33,861.80    40,850.31     51,667.96      33.63%

     - Current Account Deposits      20,044.58     24,821.61    32,167.74     36,917.09    39,754.07      28.60%

Total Advances                        59,661.14   81,556.77    104,340.95   142,407.83    169,759.54      35.71%

     - Retail Advances                13,591.68    16,051.78    20,820.73     27,759.23    37,570.33      33.30%

Total Investments                     33,705.10   46,330.35     55,974.82     71,991.62    93,192.09      28.21%

Shareholders' Funds                    8,768.50    10,213.59    16,044.45    18,998.83     22,808.54      46.39%

Total Assets/Liabilities             109,577.85   147,722.05   180,647.85    242,713.37   285,627.79      31.28%



Net Interest Income                    2,585.35    3,686.21      5,004.49     6,562.99       8,017.75     40.43%

Other Income                           1,795.49    2,896.88      3,945.78      4,632.13      5,420.22     39.94%

Operating Revenue                     4,380.84     6,583.09      8,950.27     11,195.12    13,437.97      40.23%

Operating Expenses                     2,154.92    2,858.21      3,709.72      4,779.43      6,007.10     37.67%

Operating Profit                       2,225.92    3,724.88      5,240.55      6,415.69      7,430.87     42.52%

Provisions and Contingencies           1,154.89    1,909.52      2,726.02      3,027.20      3,188.66     39.44%

Net Profit                             1,071.03     1,815.36     2,514.53     3,388.49       4,242.21     45.12%



FINANCIAL RATIOS                    2007 - 2008 2008 - 2009 2009 - 2010     2010 - 2011   2011 - 2012

Earnings Per Share (Basic) (in `)         32.15       50.61         65.78        82.95        102.94

Book Value (in `)                        245.14      284.50       395.99        462.77        551.99

Return on Equity                       16.09%       19.93%        19.89%        20.13%       21.22%

Return on Assets                         1.24%       1.44%         1.67%        1.68%         1.68%

Capital Adequacy Ratio (CAR)            13.73%      13.69%        15.80%       12.65%        13.66%

Tier I Capital (CAR)                    10.17%       9.26%        11.18%         9.41%        9.45%

Dividend Per Share (in `)                 6.00        10.00         12.00        14.00         16.00

Dividend Payout Ratio                  23.49%       23.16%        22.57%       19.78%        18.15%




                                                                                                                  5
HIGHLIGHTS

Profit after tax up 25.19% to `4,242.21 crores


Net Interest Income up 22.17% to `8,017.75 crores


Fee & Other Income up 22.33% to `5,058.66 crores


Deposits up 16.31% to `220,104.30 crores


Demand Deposits up 17.56% to `91,422.03 crores


Advances up 19.21% to `169,759.54 crores


Retail Assets up 35.34% to `37,570.33 crores


Network of branches and extension counters increased from 1,390 to 1,622


Total number of ATMs went up from 6,270 to 9,924


Net NPA ratio as a percentage of net customer assets down to 0.25% from 0.26%


Earnings per share (Basic) increased from `82.95 to `102.94


Proposed Dividend up from 140% to 160%


Capital Adequacy Ratio stood at 13.66% as against the minimum regulatory norm of 9%




6
DIRECTORS’ REPORT: 2011-12
The Board of Directors is pleased to present the Eighteenth Annual Report of the Bank together with the Audited
Statement of Accounts, Auditors’ Report and the report on business and operations of the Bank for the financial year ended
31st March 2012.
FINANCIAL PERFORMANCE
The financial highlights for the year under review are presented below:
                                                                                                              (` in crores)
PARTICULARS                                                                  2011-12          2010-11          GROWTH
Deposits                                                                   220,104.30       189,237.80             16.31%
Out of which
l Savings Bank Deposits                                                     51,667.96        40,850.31           26.48%
l Current Account Deposits                                                  39,754.07        36,917.09            7.68%
Advances                                                                   169,759.54       142,407.83           19.21%
Out of which
l Retail Advances                                                            37,570.33       27,759.23           35.34%
l Non-retail Advances                                                       132,189.21      114,648.60           15.30%
Total Assets/Liabilities                                                    285,627.79      242,713.37           17.68%
Net Interest Income                                                           8,017.75        6,562.99           22.17%
Other Income                                                                  5,420.22        4,632.13           17.01%
Out of which
l Trading Profit (1)                                                            361.56          496.97          (27.25%)
l Fee and other income                                                       5,058.66          4,135.16          22.33%
Operating Expenses (excluding depreciation)                                  5,664.86         4,489.84            26.17%
Profit before depreciation, provisions and tax                                7,773.11        6,705.28            15.93%
Depreciation                                                                    342.24          289.59            18.18%
Provision for Tax                                                            2,045.63          1,747.17           17.08%
Other Provisions and Write offs                                               1,143.03        1,280.03          (10.70%)
Net Profit                                                                   4,242.21         3,388.49            25.19%
Appropriations:
Transfer to Statutory Reserve                                                 1,060.55            847.12         25.19%
Transfer to/(from) Investment Reserve                                                -           (14.94)               -
Transfer to Capital Reserve                                                      51.90              4.76               -
Transfer to/(from) General Reserve                                                   -           338.85                -
Proposed Dividend                                                               770.08           670.36          14.88%
Surplus carried over to Balance Sheet                                         2,359.68         1,542.34          52.99%
(1)
    Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS                                                                      2011-12          2010-11
Interest Income as a percentage of working funds*                                                8.71%            7.49%
Non-Interest Income as a percentage of working funds*                                            2.15%            2.29%
Net Interest Margin                                                                              3.59%            3.65%
Return on Average Net Worth                                                                     21.22%           20.13%
Operating Profit as a percentage of working funds*                                               2.94%             3.17%
Return on Average Assets                                                                         1.68%            1.68%
Profit per employee**                                                                        `14.34 lacs      `14.35 lacs
Business (Deposits less inter-bank deposits + Advances) per employee**                     `12.76 crores    `13.66 crores
Net non-performing assets as a percentage of net customer assets***                              0.25%            0.26%
*     Working funds represent average total assets.
** Productivity ratios are based on average number of employees for the year.
*** Customer assets include advances and credit substitutes.
     Previous year figures have been regrouped wherever necessary.



                                                                                                                        7
The Bank continued to show a steady growth
                                                                                         RISING PROFITABILITY
both in business and earnings with a net profit of                                           4,242                                     13,438
                                                        (` in crores)
`4,242.21 crores for the year ended 31st March
                                                                                     3,388                                    11,195
2012, registering a growth of 25.19% over the
net profit of `3,388.49 crores last year. The                                                                         8,950
                                                                          2,515
strong growth in earnings was a result of robust
business growth across all banking segments                     1,815                                         6,583

indicative of a clear strategic focus. During the      1,071                                          4,381
year, the Basic Earnings Per Share (EPS) was at
`102.94 and a Return on Equity (ROE) at 21.22%.
                                                      2007-08 2008-09 2009-10 2010-11 2011-12        2007-08 2008-09 2009-10 2010-11 2011-12

During the year, the total income of the Bank                           Net Profit                   Operating Revenue

increased by 38.55% to reach `27,414.87 crores
as compared to `19,786.94 crores last year. Operating revenue increased by 20.03% to `13,437.97 crores while operating
profit increased by 15.82% to `7,430.87 crores. The growth in earnings was mainly due to a rise in core income streams such
as net interest income (NII) and fee income. NII increased by 22.17% to `8,017.75 crores as compared to `6,562.99 crores
last year. Fee, trading and other income increased by 17.01% to `5,420.22 crores from `4,632.13 crores last year. The strong
growth in income was partly offset by an increase in operating expenses including depreciation by 25.69% to `6,007.10
crores.
During the year, the growth in NII may be attributed to an expansion in the balance sheet size and healthy low-cost Current
Account and Savings Bank (CASA) deposits. The total earning assets on a daily average basis increased by 24.30% to `223,206
crores, as compared to `179,573 crores last year. This was partly offset by a rise in funding costs due to hardening of general
interest rates, particularly on term deposits during the year. The steady growth of low-cost CASA deposits, which on a daily
average basis increased by 18.96% to `70,845 crores from `59,551 crores last year, helped in containing the cost of funds.
Overall, the daily average cost of funds in the year increased to 6.28% from 4.96% last year. During the year, the cost of
deposits increased to 6.47% from 4.96% last year primarily due to an increase in cost of term deposits by 211 basis points
(from 6.81% to 8.92%) as well as the cost of savings bank deposits. During the year, the yield on earning assets increased by
125 basis points to 9.66% from 8.41% last year.
                                                                                   Other income comprising fees, trading profit
                                                                                   and miscellaneous income increased by 17.01%
           FEE & MISCELLANEOUS INCOME                      TRADING PROFITS
                                                                                   to `5,420.22 crores in 2011-12 from `4,632.13
                                    5,059                     822
                                                                                   crores last year and constituted 40.34% of
     (` in crores)                           (` in crores)
                            4,135                                                  operating revenue of the Bank. Fee income is a
                                                                     497
                                                                                   significant part of the earnings and is generated
                     3,123
                                                       374
                                                                                   from a diverse set of businesses in the Bank.
               2,523                                                         362
                                                                                   The main sources of fee income are client-
                                             254
    1,542                                                                          based merchant foreign exchange trade, service
                                                                                   charges from account maintenance, transaction
                                                                                   banking (including cash management services),
   2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12
                                                                                   syndication and placement fees, processing
                                                                                   fees from loans and commission on non-
funded products (such as letters of credit and bank guarantees), inter-change fees on ATM-sharing arrangements and fee
income from the distribution of third-party personal investment products. During the year, proprietary trading profits fell by
27.25% to `361.56 crores from `496.97 crores last year, owing to adverse market conditions in the debt and equity markets.
Miscellaneous income dropped by 3.79%, mainly due to lower recoveries of loans written-off in earlier years. During the year,
such recoveries accounted to `291.84 crores.
During the year, the operating revenue of the Bank increased by 20.03% to `13,437.97 crores, as compared to `11,195.12
crores last year. The core income streams (NII, fee and miscellaneous income) constituted 97.31% of the operating revenue,
reflecting the stability and sustainability of the Bank’s earnings. Operating expenses increased by 25.69% to `6,007.10
crores from `4,779.43 crores last year, as a result of the growth of the Bank’s network and other infrastructure required for
supporting the existing and new businesses. The Cost to Income ratio of the Bank was 44.70% compared to 42.69% last year.



 8
                                                                                                                           During the year, the operating profit
                         SHAREHOLDER RETURNS                                            RETURN ON ASSETS
                                                                                                                           of the Bank increased by 15.82% to
                                     552
                                                                                                                           `7,430.87 crores from `6,415.69 crores
                            463                     19.9 19.9 20.1 21.2                            1.67% 1.68% 1.68%
                                                                                                                           last year. During this period, the Bank
                    396                                                                    1.44%
                                            16.1
                                                                                   1.24%
                                                                                                                           created total provisions (excluding
            285                                                                                                            provisions for tax) of `1,143.03 crores
    245
                                                                                                                           compared to `1,280.03 crores last year.
                                                                                                                           Of this, the Bank provided `860.43
                                                                                                                           crores towards loan/investment losses
                                                                                                                           compared to `955.12 crores last year,
   2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12 while the provision for standard assets
         Book value per Share (`)              Return on Average Net Worth (%)
                                                                                                                           was `150.30 crores. The Bank also
                                                                                                                           provided `88.86 crores compared to
`15.06 crores last year against restructured assets. During the year, the Bank restructured loans of `1,300.29 crores. The Bank
continued to maintain a healthy asset-quality with a ratio of Gross NPAs to gross customer assets of 0.94%, as compared to
1.01% last year, and a Net NPA ratio (Net NPAs as percentage of net customer assets) of 0.25% compared to 0.26% last year.
With higher levels of provisions built over and above regulatory norms during the year, the Bank has maintained its provision
coverage to 80.91% (after considering prudential write-offs).
The Bank has also shown an all-round improvement in various financial parameters and ratios during the year. Basic Earnings
Per Share (EPS) was `102.94 as compared to `82.95 last year, while the Diluted Earnings Per Share was `102.20 compared
to `81.61 last year. Return on Equity (RoE) improved to 21.22% from 20.13% last year and Book Value Per Share increased
from `462.77 to `551.99. Return on Assets (RoA) is maintained at 1.68% as last year. The hardening of interest rates led to
a contraction in the net interest margin (NIM) by 6 basis points for the year to 3.59% from 3.65% last year. On quarter-on-
quarter basis, the NIM was 3.28% in Q1, 3.78% in Q2, 3.75% in Q3 and 3.55% in Q4.
The Bank has shown robust growth in several key balance sheet parameters for the year ended 31st March 2012. The total
assets increased by 17.68% to `285,628 crores on 31st March 2012 from `242,713 crores on 31st March 2011. Total deposits
increased by 16.31% and stood at `220,104 crores. Savings Bank deposits increased by 26.48% to `51,668 crores, while
Current Account deposits increased by 7.68% to `39,754 crores. Low-cost demand deposits: Current Accounts and Savings
Bank (CASA) deposits were `91,422 crores as on 31st March 2012, as compared to `77,767 crores last year. As on 31st March
2012, CASA deposits constituted 41.54% of total deposits as compared to 41.10% last year. On a daily average basis, Savings
Bank deposits increased by 20.43% to `43,442 crores, while Current Account deposits increased by 16.71% to `27,403 crores.
The percentage share of CASA in total deposits, on a daily average basis, was 37.65% compared to 39.40% last year. The total
advances of the Bank increased by 19.21% to `169,760 crores. Out of this, corporate advances (comprising large, infrastructure
and mid-corporate accounts) increased by 19.93% to `91,053 crores and SME loans increased by 11.16% to `23,795 crores.
Agricultural lending (including micro finance) stood at `17,340 crores, increasing 0.11% over the last year. Retail loans increased
by 35.34% to `37,570 crores. The percentage share of retail loans to total advances has increased to 22.13% from 19.49%
last year. The total investments of the Bank increased by 29.45% to `93,192 crores and investments in government and
approved securities, held mainly for SLR requirement, increased by 32.43% to `58,533 crores. Other investments, including
                                                                                        corporate debt securities, increased
                                 INCREASING REACH
                         1,622                      1,050                               by 24.70% to `34,659 crores. As on
                   1,390                        921
                                                                                  9,924 31st March 2012, the total assets of
                                                                                        the Bank’s overseas branches stood at
               983                        643                               6,270       `32,302 crores, constituting 11.31% of
         792                                                                            the Bank’s total assets.
                                                      515
                                                                                                        4,293
    644                                       405                                               3,595                            During the year, the Bank continued
                                                                                        2,764
                                                                                                                                 to expand its distribution network
                                                                                                                                 to enlarge its reach in geographical
                                                                                                                                 centres with potential for growth,
   2007-08 2008-09 2009-10 2010-11 2011-12   2007-08 2008-09 2009-10 2010-11 2011-12   2007-08 2008-09 2009-10 2010-11 2011-12   especially in the areas with potential
           BRANCHES + Extn. Counters                   CENTRES COVERED                                   ATMs
                                                                                                                                 for low-cost CASA deposits, lending to




                                                                                                                                                                    9
retail, agriculture and SME segments and the distribution of third-party products. This year, the Bank has added 231 new
branches and 1 extension counter, taking the total number of branches and extension counters (ECs) to 1,622, of which 674
branches/ECs are in semi-urban and rural areas and 948 branches are in metropolitan and urban areas. The Bank is present
in all the States and Union Territories (except Lakshadweep), covering a total of 1,050 centres. The Bank has also increased
its ATM network to 9,924, as compared to 6,270 ATMs last year. In addition to domestic branches, during the year the Bank
opened an international branch office in Colombo, Sri Lanka to finance cross-border trade and manufacturing activities.
This is in addition to the existing branches at Singapore, Hong Kong and DIFC (Dubai International Finance Centre) and
representative offices at Shanghai, Dubai and Abu Dhabi.
CAPITAL & RESERVES
During the year, the Bank has raised capital of `3,425 crores by way
of sub-ordinated bonds (unsecured redeemable non-convertible                                           ENHANCING SHAREHOLDER VALUE
debentures) qualifying as Tier II capital. The raising of this non-                                                    102.20
                                                                                                                                                         160
equity capital has helped the Bank continue its growth strategy                                                81.61                               140
and has strengthened its capital adequacy ratio. The Bank is well                                                                            120
capitalised with an overall capital adequacy ratio (CAR) of 13.66%                                     64.31
                                                                                                                                       100
at the end of the year, well above the benchmark requirement of                                50.27

9% stipulated by Reserve Bank of India (RBI). Of this, Tier I CAR                      31.31                                    60

was 9.45%, as against 9.41% last year, while the Tier II CAR was at
4.21%, as against 3.24% last year.
During the year, a total of 2,658,109 equity shares were allotted to    2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12
                                                                                 Earning Per Share (Diluted) `                 Dividend (%)
employees of the Bank pursuant to the exercise of options under its
Employee Stock Option Scheme. The paid-up capital of the Bank
rose to `413.20 crores, as compared to `410.55 crores last year. The shareholding pattern of the Bank as of 31st March 2012
was as under:

Sr. No.                                       Name of Shareholders                                                                   % of Paid-up Capital
i.           Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)                                                         23.53
ii.          Life Insurance Corporation of India (LIC)                                                                                             9.69 (1)
iii.         General Insurance Corporation and four PSU insurance companies                                                                          4.16
iv.          Overseas investors (including FIIs/OCBs/NRIs)                                                                                          33.19
v.           Foreign Direct Investment (GDR issue)                                                                                                   8.54
vi.          Other Indian financial institutions/mutual funds/banks                                                                                  6.45
vii.         Others                                                                                                                                14.44
             Total                                                                                                                                100.00
  Save and except 4,00,40,156 shares equivalent to 9.69% of the total paid up capital of the Bank held by LIC, all other
(1)

holdings are not considered for arriving at the Promoter’s shareholding.

The Bank’s shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange
(LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees
relating to all stock exchanges for the current year have been paid.
DIVIDEND
The Diluted Earnings Per Share (EPS) for 2011-12 has risen to `102.20 from `81.61 last year. In view of the overall performance
of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy
capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of `16.00 per
equity share, compared to `14.00 per equity share declared last year. This dividend shall be subject to tax on dividend to be
paid by the Bank. This increase reflects our confidence in the Bank’s ability to consistently grow earnings over time.
BOARD OF DIRECTORS
During the year, some changes in the composition of the Board of Directors have taken place. Shri J. R. Varma ceased to
be a Director of the Bank at the conclusion of the last Annual General Meeting with effect from 17th June 2011. Shri S. K.
Roongta, resigned as a Director of the Bank with effect from 20th June 2011. Shri R. B. L. Vaish tendered his resignation


  10
as a Director on completion of his tenure as LIC Nominee with effect from 5th September 2011. Shri S. K. Chakrabarti,
Deputy Managing Director, retired from the services of the Bank on 30th September 2011 and accordingly ceased to
be a Director of the Bank with effect from 1st October 2011. Shri M. V. Subbiah resigned as a director with effect from
26th April, 2012. Prof. Samir K. Barua, Director, Indian Institute of Management, Ahmedabad was appointed as an
Additional Independent Director of the Bank with effect from 22nd July 2011. Shri A. K. Dasgupta was nominated by LIC
as its Nominee Director in place of Shri R. B. L. Vaish and was accordingly appointed as an Additional Director of the Bank
with effect from 5th September 2011. Shri Som Mittal, President of NASSCOM was appointed as an Additional Independent
Director of the Bank with effect from 22nd October 2011. We report with sadness the demise of Dr. R. H. Patil who passed
away on 12th April 2012. The Board of Directors places on record its deep appreciation and gratitude to Dr. R. H. Patil,
Shri M. V. Subbiah, Shri J. R. Varma, Shri S. K. Roongta, Shri R. B. L. Vaish and Shri S. K. Chakrabarti for the valuable services
rendered by them during their tenure as Directors of the Bank.
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Smt. Rama
Bijapurkar and Shri V. R. Kaundinya retire by rotation at the Eighteenth Annual General Meeting and, being eligible, offer
themselves for re-appointment as Directors of the Bank.
The Board of Directors of the Bank at its meeting held on 13th February 2012, has re-appointed Smt. Shikha Sharma as
Managing Director & CEO for a further period of three years i.e. from 1st June 2012 till 31st May 2015. The re-appointment is
subject to approval of Reserve Bank of India and the shareholders. Further, the Board of Directors of the Bank at its meeting
held on 27th April, 2012, has decided to appoint Shri V. Srinivasan and Shri Somnath Sengupta, Executive Directors of the Bank
as the Whole-time Directors of the Bank with effect from the date as may be approved by RBI.
SUBSIDIARIES
The Bank has set up six wholly-owned subsidiaries: Axis Securities and Sales Ltd., Axis Private Equity Ltd., Axis Trustee Services
Ltd., Axis Asset Management Company Ltd., Axis Mutual Fund Trustee Ltd., and Axis U.K. Ltd.
Axis Securities and Sales Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides
retail broking services. The primary objective of Axis Securities and Sales Ltd. is to build a specialised force of sales personnel
and optimise operational efficiency by providing greater control over the sales functions, as compared to a Direct Sales Agent
(DSA) model as well as undertake retail broking business. Axis Private Equity Ltd. primarily carries on the activities of managing
equity investments and provides venture capital support to businesses. Axis Trustee Services Ltd. is engaged in trusteeship
activities (e.g. acting as debenture trustee and as trustee to various securitisation trusts). Axis Asset Management Company
Ltd. undertakes the activities of managing the mutual fund business. Axis Mutual Fund Trustee Ltd. was formed to act as the
trustee for the mutual fund business. Axis U.K. Ltd. is a private limited company registered in the UK. It was formed with the
main purpose of filing an application with Financial Services Authority (FSA), UK for a banking license in the UK and for the
creation of necessary infrastructure for the subsidiary to commence banking business in the UK. As of 31st March 2012, Axis
U.K. Ltd. has not commenced operations.
In terms of the General Circular No. 2/2011 dated 8th February 2011 issued by the Ministry of Corporate Affairs, Government
of India, the copies of Directors’ Reports, Auditors’ Reports and the financial statements of the six subsidiaries have not been
attached to the accounts of the Bank for the financial year ended 31st March 2012. Any shareholder who may be interested in
obtaining a copy of the aforesaid documents may write to the Company Secretary at the Registered Office of the Bank. These
documents will also be available for examination by shareholders of the Bank at its Registered Office. The documents related
to individual subsidiaries will similarly be available for examination at the respective registered offices of the companies. In line
with the Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India, the consolidated financial
results of the Bank along with its subsidiaries for the year ended 31st March 2012 are enclosed as an Annexure to this report.
PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD.
On 17th November, 2010, the Board of Directors of the Bank had approved the acquisition of certain financial services business
undertaken by Enam Securities Private Limited (ESPL) directly and through its wholly owned subsidiaries, by Axis Securities
and Sales Limited (ASSL), a wholly owned subsidiary of the Bank by way of a demerger. However, pursuant to conditions
prescribed by the Reserve Bank of India, certain modifications have been carried out to the demerger structure in terms
of a revised Scheme of Arrangement under Sections 391-394 and other relevant provisions of the Companies Act, 1956.
Accordingly, the acquisition will now comprise (a) a demerger of the financial services businesses from ESPL to the Bank, in
consideration of which the Bank will issue shares to the shareholders of ESPL, and (b) immediately upon completion of the
demerger under the Scheme, a simultaneous sale of the financial services businesses will be undertaken from the Bank to ASSL



                                                                                                                                11
for a cash consideration, with both the aforesaid steps occurring simultaneously. The Reserve Bank of India has on 30th March,
2012, conveyed its no objection to the Scheme. Further, on 27th April, 2012, the Board of Directors of the Bank have approved
the reassessment of the valuation of the ESPL business at `1,396 crores and consequently, in consideration for the demerger
of the financial services business of ESPL, the Bank will issue shares in the ratio of 5 equity shares of the Bank (aggregating
12,090,000 equity shares) of the face value of `10 each for every 1 equity share (aggregating 2,418,000 equity shares) of `10
each held by the shareholders of ESPL. The sale of the financial services business will be simultaneously undertaken from the
Bank to ASSL for a cash consideration of `274 crores only. The appointed date under the Scheme is 1st April, 2010, and the
parties shall proceed with filing the Revised Scheme and other necessary documents with the relevant High Courts and other
regulatory authorities for their approval.
EMPLOYEE STOCK OPTION PLAN (ESOP)
The Bank has instituted an Employee Stock Option Scheme to enable its employees and the employees of its subsidiaries
including Whole-time Directors, to participate in the future growth and financial success of the Bank. Under the Scheme
40,517,400 options can be granted to employees. The employee stock option scheme is in accordance with the Securities
and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility
and number of options to be granted to an employee is determined on the basis of the employee’s work performance and is
approved by the Board of Directors.
The Bank’s shareholders approved plans for the issuance of stock options to employees in February 2001, June 2004, June
2006, June 2008 and June 2010. Under the first two plans and upto the grant made on 29th April 2004, the option conversion
price was set at the average daily high-low price of the Bank’s equity shares traded during the 52 weeks preceding the date of
grant at the Stock Exchange which has had the maximum trading volume of the Bank’s equity share during that period. Under
the third plan and with effect from the grant made by the Bank on 10th June 2005, the pricing formula has been changed
to the closing price on the day previous to the grant date. The Remuneration and Nomination Committee granted options
under these plans on eleven occasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04,
3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355
during 2008-09, 4,413,990 during 2009-10, 2,915,200 during 2010-11 and 3,268,700 during 2011-12. The options granted,
which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant,
subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31st March 2012,
24,368,087 options had been exercised and 11,428,248 options were in force.
Other statutory disclosures as required by the revised SEBI guidelines on ESOPs are given in the Annexure to this report.
CORPORATE GOVERNANCE
The Bank is committed to achieve the highest standards of corporate governance, and it aspires to benchmark itself with
international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an
Annexure to this report.
The Bank has adopted a major part of the recommendations contained in the Corporate Governance Voluntary Guidelines 2009
issued by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors hereby declares and confirms that:
l     The applicable accounting standards have been followed in the preparation of the annual accounts and proper
      explanations have been furnished, relating to material departures.
l     Accounting policies have been selected and applied consistently and reasonably, and prudent judgements and estimates
      have been made so as to give a true and fair view of the state of affairs of the Bank and of the Profit and Loss of the
      Bank for the financial year ended 31st March 2012.
l     Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the
      provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank, and for preventing and
      detecting fraud and other irregularities.
l     The annual accounts have been prepared on a going concern basis.
l     The Bank has in place a system to ensure compliance of all laws applicable to the Bank.




 12
STATUTORY DISCLOSURE
Considering the nature of activities of the Bank, the provisions of Section 217(1)(e) of the Companies Act, 1956 relating to
conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its
goal of technological upgradation in a cost-effective manner for delivering quality customer service.
The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the
rules hereunder is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1)(iv) of the
Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested
in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Bank.
AUDITORS
M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Bank will retire on the conclusion of the
Eighteenth Annual General Meeting and are eligible for re-appointment, subject to the approval of Reserve Bank of India
and the shareholders. As recommended by the Audit Committee of the Board, the Board of Directors has proposed the
appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors for the financial year 2012-13. The
shareholders are requested to consider their appointment on the remuneration to be decided by the Audit Committee of the
Board.
ACKNOWLEDGEMENTS
The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities,
financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of
the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage.
The Board also expresses its appreciation to all employees of the Bank for their strong work ethic, excellent performance,
professionalism, teamwork, commitment and initiative, which has led to the Bank making commendable progress in today’s
challenging environment.
                                                                          For and on behalf of the Board of Directors


Place : Mumbai                                                                            Adarsh Kishore
Date : 27th April, 2012                                                                     Chairman




                                                                                                                           13
ANNEXURE
STATUTORY DISCLOSURES REGARDING ESOP
(FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH, 2012)

Options Granted                                                                                                   39,891,590
Options Exercised & Shares Allotted*                                                                              24,368,087
Options lapsed/cancelled                                                                                           4,095,255
Total Options (in force) as on March 31, 2012                                                                     11,428,248
Options Vested                                                                                                     4,983,892
Money realised by exercise of options (` in lacs)                                                                   67,022.44
* One (1) share would arise on exercise of one (1) stock option

Pricing Formula                                               Fixed Price i.e. The average daily high – low price of the shares
                                                              of the Bank traded during the 52 weeks preceding the date
                                                              of grant at that stock exchange which has had the maximum
                                                              trading volume of the Bank’s share during that period.
                                                              For options granted on and after 10 June 2005, the exercise
                                                              price considered is the closing market price as on the day
                                                              preceding the date of the grant at that stock exchange which
                                                              has had the maximum trading volume of the Bank’s share.
Variation in terms of ESOP                                    None

Details of options granted:
l   Employee wise details of grants to Senior managerial
    personnel                                            Managing Director & CEO : 475,000 options
l   Employees who were granted, during any one year,
    options amounting to 5% or more of the options granted
    during the year                                        Managing Director & CEO : 200,000 options
l   Identified employees who were granted options, during
    any one year, equal or exceeding 1% of the issued capital
    (excluding outstanding warrants and conversions) of the
    Bank under the grant                                      None
Diluted Earnings Per Share pursuant to issue of shares on
exercise of options calculated in accordance with Accounting
Standard 20 (AS-20) ‘Earnings Per Share’                     `102.20 per share

Weighted average exercise price of Options whose:
l   Exercise price equals market price                        Weighted average exercise price of the stock options granted
                                                              during the year is `1,200.11.
l   Exercise price is greater than market price               Nil
l   Exercise price is less than market price                  Nil

Weighted average fair value of Options whose:
l   Exercise price equals market price                        Weighted average fair value of the stock options granted
                                                              during the year is `559.31.
l	 Exercise   price is greater than market price              Nil
l	 Exercise   price is less than market price                 Nil




14
Fair Value Related Disclosure
l	 Increase  in the employee compensation cost computed
   at fair value over the cost computed using intrinsic cost
   method                                                    `147.16 crores
l	 NetProfit, if the employee compensation cost had been
   computed at fair value                                `4,095.05 crores
       EPS, if the employee compensation cost had been
l	 Basic
   computed at fair value                              `99.37 per share
         EPS, if the employee compensation cost had been
l	 Diluted
   computed at fair value                                `98.65 per share

Significant Assumptions used to estimate fair value
l	 Risk   free interest rate                                 8.05% to 8.10%
l	 Expected    life                                          2 to 4 years
l	 Expected    Volatility                                    39.43% to 53.33%
l	 Dividend    Yield                                         1.23%
l	 Priceof the underlying share in the market at the time of
   option grant                                              `1,447.55




                                                                                15
  STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES
       ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
 Sr.      Name of the        Financial       Number of         Extent of       Net aggregate         Net aggregate
 No.       Subsidiary        year end      equity shares        interest          amount of      amount of profits/
           Company             of the       held by Axis         of Axis    profits/(losses) of      (losses) of the
                            subsidiary      Bank and/or         Bank in      the subsidiary so    subsidiary so far
                                          its nominees in     the capital    far as it concerns   as it concerns the
                                         subsidiary as on        of the       the members of      members of Axis
                                           31 March 2012      subsidiary    Axis Bank Ltd. and       Bank Ltd. and
                                                                             is not dealt with      is dealt with or
                                                                            in the accounts of   provided for in the
                                                                            Axis Bank Ltd. for    accounts of Axis
                                                                            the financial year    Bank Ltd. for the
                                                                              ended 31 March    financial year ended
                                                                                     2012            31 March 2012
                                                                              (` in thousands)     (` in thousands)
  1.     Axis Securities    31-3-2012      120,000,000          100%               (89,246)                Nil
        and Sales Limited                shares of `10.00
                                         each fully paid up
  2.      Axis Private      31-3-2012       15,000,000          100%              8,492                 Nil
         Equity Limited                  shares of `10.00
                                         each fully paid up
  3.      Axis Trustee      31-3-2012    1,500,000 shares       100%             107,204                Nil
        Services Limited                  of `10.00 each
                                            fully paid up
  4.    Axis Mutual Fund    31-3-2012    50,000 shares of       100%               325                  Nil
         Trustee Limited                 `10.00 each fully
                                               paid up
  5.       Axis Asset       31-3-2012      174,000,000          100%             (215,933)              Nil
         Management                      shares of `10.00
        Company Limited                  each fully paid up
  6.    Axis U.K. Limited   31-3-2012      1 share of £1        100%                 -                  Nil
                                            fully paid up


                                                                                             For Axis Bank Ltd.



                                                                                             Adarsh Kishore
                                                                                             Chairman


                            K. N. Prithviraj       V. R. Kaundinya          S. B. Mathur     Shikha Sharma
                            Director               Director                 Director         Managing Director & CEO


P. J. Oza                   Somnath Sengupta
Company Secretary           Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai



 16
MANAGEMENT’S DISCUSSION AND ANALYSIS
MACRO-ECONOMIC ENVIRONMENT

Macro-economic conditions in fiscal 2011-12 continued to be challenging and the continuing uncertainties in the international
financial markets had an impact on emerging market economies, including India. Sovereign risk concerns, particularly in the
Euro zone, affected financial markets and a fear of defaults by some European countries along with a growth slowdown led
to increased risk aversion. The year saw banks overseas reduce their debt exposure to emerging markets, causing a drop in
fund flows to emerging markets, affecting India.

In India, managing growth and price stability emerged as key concerns. High and persisting inflation is perceived as a risk to
sustaining the country’s growth and it remained high during the most of the current fiscal year, though by year’s end there was
a decline. Initially confined to high food prices, inflationary pressures spilled over to other segments, particularly manufactured
products. During the year, the dominating objective of RBI’s monetary policy was to control inflation and curb inflationary
expectations. As a consequence, RBI hiked the Repo rate from 6.75% to 8.50% (cumulatively 375 basis points between March
2010 and January 2012). Sustained rate increases resulted in a slowing down of investment and growth and GDP is estimated
to have grown by 6.9% in fiscal 2011-12, having grown at a rate of 8.4% in each of the two preceding years. While agriculture
and services continue to perform well, the slowdown in GDP during the year may be attributed to slower industrial growth.
The gross domestic savings has declined, evidenced by a reduction in private savings, primarily household savings in financial
assets. The reduction in the financial savings rate of households is partly attributed to inflationary tendencies that resulted in
higher growth of private consumption expenditure.

The fiscal deficit for FY 2011-12 has been estimated at 5.9% against the budgetary estimate of 4.6%, the large gap explained
by deceleration in tax revenues as well as increase in expenditure, particularly on account of fertiliser and petroleum subsidies.
This has led to an increase in the government’s borrowing programme. India’s current account deficit (CAD) rose to record
highs in the October to December quarter (Q3) of fiscal 2011-12, and has been comparatively high in the April to December
period compared to earlier years. The current account deficit was a manifestation of domestic demand which kept imports
high and the global slowdown, which adversely affected India’s exports in the second half of fiscal. The high CAD was made
worse by weakening capital flows, mostly due to weak portfolio investment flows which had thus far managed to compensate
the trade deficit. As a result, the Balance of Payments position turned negative in Q3, the first quarter in which this has
happened since the collapse of Lehman Brothers. This led to a depreciation of the Rupee and a sharp increase in the domestic
liquidity deficit.

The banking sector, which remains the largest financial intermediary, saw a slowdown in deposit growth in fiscal 2011-12,
primarily due to liquidity pressures and lower financial savings. While the credit off-take was lower than estimated, the
subdued deposit growth has resulted in an increase in interest rates at the shorter end of the yield curve. The sovereign yield
curve remained high due to the larger than expected magnitude of the Government’s borrowing programme. Shorter term
interest rates on private sector borrowings also stayed high due to the liquidity deficit.

Prospects for Fiscal 2012-13

The global environment is likely to continue to be an area of concern, although conditions have improved since the beginning
of the last financial year. Growth is likely to improve in the second half of 2012 and may support the country’s exports and
increase access to global capital. India remains one of the fastest growing economies of the world, with a projected GDP
growth rate of 7.6% +/- 0.25%. Falling inflation is also an encouraging factor with the average inflation forecast for FY 2012-
13 at 7.5% compared to the average inflation of nearly 9% last year. There is an expectation that RBI may cut policy interest
rates by 75-100 basis points in the course of the year (FY 2012-13) and combined with other measures such as further Open
Market Operations (OMOs) and CRR cuts by the RBI as well as an increasein foreign currency inflows, this may lead to a drop
in borrowing costs.

The benefit of lower borrowing costs on investment will also be reinforced by a reduced fiscal deficit, budgeted at 5.1% to
GDP in fiscal 2012-13 through a capping of subsidies at 2% of GDP. This reduction would open up the scope for higher private
sector investment and capex. On the external front, the CAD/GDP ratio is projected to be lower in FY 2012-13 compared to
the previous year. The outlook for growth and price stability at this point looks more promising.




                                                                                                                              17
Trends in Credit, Deposit and Liquidity

As we have stated above, improving profitability, fiscal consolidation and moderating inflation are likely to increase domestic
savings and create conditions for higher inflows of foreign capital, thereby improving liquidity. India’s financial savings to GDP
ratio in fiscal 2012-13 is likely to be higher than in the previous year, given an expected reallocation from physical assets to
financial assets by the household sector as well as relatively better financial performance by the corporate sector.

Aggregate deposits outstanding as on the 30th March 2012 were `61.12 lac crores, showing a year-on-year growth of 17.4%,
while bank credit grew by 19.3% at `47.05 lac crores. A deposit growth of between 16% and 16.5% and a bank credit
growth of around 17% is expected for FY 2012-13. Although there will be some diversion of demand for debt funds towards
external commercial borrowings following the provisions in the Union Budget, the bulk of the increase will come into domestic
credit.

OVERVIEW OF FINANCIAL AND BUSINESS PERFORMANCE

The Bank continued to perform well, both in terms of business growth as well as the financial results reported. The business
model of the Bank and the customer-centric branch banking model adopted by it has not only helped maintain existing
relationships but has also resulted in new
business and customer acquisition, both in the
retail and corporate segments. In the backdrop                            3.75        3.65 3.59
                                                                                                                                            8,018
                                                     3.47    3.33
of several negative factors in the environment,
                                                                                                                                   6,563
including the slow-down of the economy,
tightness of liquidity and hardening interest                                                                         5,004

rates, the Bank has performed well, as stated                                                            3,686
                                                                                                 2,585
above, by leveraging upon its basic strengths:
an infrastructure of branches and other channels
created for maximum reach, a well developed
                                                   2007-08 2008-09 2009-10 2010-11 2011-12      2007-08 2008-09 2009-10 2010-11 2011-12
retail franchise and a number of key corporate
                                                               Net Interest Margins (%)                  Net interest Income (`. in crores)
relationships.

                                                                                          The Bank recorded strong growth during
                                   LOW COST OF FUNDS                                      the year, both of business volumes as
                                                           6.50
                       46.73                                                         6.28
                                                   6.02                                   well as revenues, with the net profit
     45.68
                                                                     5.20                 increasing by 25.19% to `4,242.21 crores
                                                                                4.96
                                                                                          from `3,388.49 crores last year. During
             43.15
                                                                                          the year, the total income of the Bank
                                41.10      41.54                                          increased by 38.55% to `27,414.87
                                                                                          crores, while the operating revenue
                                                                                          increased by 20.03% to `13,437.97
                                                                                          crores. During the period, operating
                                                                                          profit increased by 15.82% to `7,430.87
    2007-08 2008-09 2009-10 2010-11 2011-12       2007-08 2008-09 2009-10 2010-11 2011-12 crores. As on 31st March 2012, the total
     Demand Deposits as % Share of Total Deposits             Cost of Funds (%)           assets of the Bank stood at `285,628
                                                                                          crores, increasing by 17.68% over last
year. While the total deposits of the Bank increased by 16.31% to `220,104 crores on 31st March 2012, the total advances
rose by 19.21% to `169,760 crores. The total demand deposits (Savings Bank and Current Account deposits) increased by
17.56% to `91,422 crores, constituting 41.54% of the total deposits. The Bank continues to enhance shareholder value with
the diluted earnings per share for the year increasing to `102.20 from `81.61 last year. As on 31st March 2012, the book value
per share of the Bank increased to `551.99 from `462.77 last year.




 18
CAPITAL MANAGEMENT
The Bank strives for continual enhancement of shareholder value by efficiently using capital in order to optimise return on
equity. Aiming to achieve this objective, the Bank endeavours to develop an asset structure that will be sensitive to the
importance of increasing the proportion of low risk weighted assets. The Bank’s capital management framework helps ensure
an appropriate composition of capital and an optimal mix of businesses.

During the year, the Bank raised capital aggregating `3,425 crores of Tier II Capital in the form of subordinated bonds
(unsecured redeemable non-convertible debentures) to augment the overall capital base and maintain the momentum of
business growth.

The Bank has implemented the Revised Framework of the International Convergence of Capital Measurement and Capital
Standards (or Basel II) in 2008. In terms of RBI guidelines, capital charge for credit and market risk for the financial year ended
31st March 2012 is required to be maintained at the higher levels as required under Basel II or 80% of the minimum capital
requirement computed under Basel I. In terms of regulatory guidelines on Basel II, the Bank has computed capital charge
for operational risk under the Basic Indicator Approach and the capital charge for credit risk has been computed under the
Standardised Approach. As on 31st March 2012, the Bank’s Capital Adequacy Ratio (CAR) under Basel II was 13.66% against
12.65%on 31st March 2011 and the minimum regulatory requirement of 9%. Of this the Tier I Capital Adequacy Ratio was
9.45%, as against 9.41% last year, while the Tier II Capital Adequacy Ratio was 4.21%. The following table sets forth the
capital, risk-weighted assets and capital adequacy ratios computed as on 31st March 2011 and 2012 in accordance with the
applicable RBI guidelines under Basel II.

                                                                                                                      (` in crores)
AS ON 31 MARCH
            ST
                                                                                                            2012              2011

Tier I Capital – Shareholders’ Funds                                                                   21,886.11         18,503.49

Tier II Capital                                                                                         9,758.84          6,366.86
Out of which
-   Bonds qualifying as Tier II capital                                                                 7,737.52          4,587.60
-   Upper Tier II capital                                                                               1,374.74          1,242.80
-   Other eligible for Tier II capital                                                                    646.58            536.46

Total Capital qualifying for computation of Capital Adequacy Ratio                                    31,644.95          24,870.35

Total Risk-Weighted Assets and Contingencies                                                          231,711.39       196,562.61

Total Capital Adequacy Ratio (CAR)                                                                       13.66%            12.65%
Out of above
- Tier I Capital                                                                                          9.45%             9.41%
-   Tier II Capital                                                                                       4.21%             3.24%

BUSINESS OVERVIEW
An overview of various business segments along with the performance during 2011-12 and their future strategies is presented
below.

RETAIL BANKING

The Bank aims to increase its share in India’s expanding financial services sector by continuing to strengthen its retail franchise.
Retail Banking continued to be one of the key drivers of the Bank’s growth strategy and it encompasses a wide range of
products delivered to customers through multiple channels. The Bank offers a complete suite of products across deposits,
loans, investment solutions, payments and cards to help customers achieve their financial objectives. The Bank has maintained
its focus on product differentiation as well as a high level of customer-service to enable it to build its retail business.




                                                                                                                               19
The Bank has pursued an effective customer segmentation strategy                                                               RETAIL LIABILITIES
over the years to develop the retail liabilities business and increase                                                                                                51,668

its retail deposit base, particularly Savings Bank and Current
                                                                                                                                                            40,850
Account deposits. The Savings Bank deposits of the Bank grew
                                                                                                                                           33,862
to `51,668 crores as on 31st March 2012, against `40,850 crores
last year, registering a strong growth of 26%, with the number                                                              25,822
of savings bank accounts growing to 119.35 lac on the 31st March                                                 19,982
2012, registering a growth of 27% over the previous year. In the
back drop of deregulation of interest rates on Savings Bank deposits
by Reserve Bank of India (RBI), the growth is significant. Over a five-
year period, Savings Bank deposits have grown at a Compounded                                                2007-08       2008-09        2009-10           2010-11   2011-12
Annual Growth Rate (CAGR) of 34%. On a daily average basis,                                                                          SB Deposits (` in crores)
Savings Bank deposits grew by 20% to `43,442 crores.

                                                                                                                   With an objective to widen the retail deposit
                                             RETAIL ASSETS                                                         base, the Bank continued to focus on retail term
                                                                                                     1,695,665
                                             37,570                                                                deposits which grew by 43% to `47,866 crores
                                                                                        1,514,935
                                                                                                                   as on 31st March 2012, against `33,457 crores
                                 27,759
                                                                            1,117,734                              last year. As a result, the percentage share of
                                                                992,286
                     20,821                           899,594                                                      retail term deposits to total term deposits has
 13,592
           16,052                                                                                                  increased to 37% on 31st March 2012 from 30%
                                                                                                                   last year. The share of aggregate retail deposits,
                                                                                                                   comprising savings bank and retail term deposits
                                                                                                                   in total deposits has increased to 45% on 31st
2007-08   2008-09   2009-10     2010-11      2011-12 2007-08    2008-09     2009-10        2010-11    2011-12      March 2012 from 39% last year.
               Retail Assets (` in crores)                                No. of Clients


                                                                                                        6%
The Bank has also focused on increasing its share of retail loans in                                         2%
                                                                                                                 4%
total loans. The retail assets portfolio of the Bank has increased to
`37,570 crores as on 31 March 2012 from `27,759 crores last year,
                         st

thereby registering a growth of 35%. Retail assets constituted 22%                                                     13%

of the Bank’s total loan portfolio as on 31st March 2012, against
19% at the end of last year. The growth areas identified by the
Bank were in the areas of residential mortgages and passenger car                  75%

loans. Of the total retail loans portfolio, 88.47% is in the form
of secured loans (residential mortgages and auto loans). The
Bank has continued to develop its risk management capabilities in
Retail business, both from a credit and operations risk standpoint.
                                                                         Personal loans Cards Non -Schematic  Auto loans Housing loan
The credit risk on the retail loans portfolio continued to improve
through the year and the gross NPA ratio for retail assets improved
to 0.85% as on 31st March 2012 from 1.49% last year. The branch channel was effectively utilised for growing the retail assets
business, with loan and card products being offered to existing clientele. Unsecured lending business products are also being
offered with appropriately conservative risk management guardrails.
In order to build an integrated strategy for Retail NRI business including remittances to and from overseas centres, a new
department - ‘International Retail’ has been set up. It focuses specifically on the overseas sales channel, retail foreign exchange
business, remittances and retail businesses in overseas centres such as Hong Kong and Sri Lanka, where the Bank has a presence.
The products offered in the area of retail forex and remittances include travel currency cards, inward and outward wire transfers,
traveller’s cheques, foreign currency notes, remittance facilities through online portals as well as through collaboration with
correspondent banks, exchange houses and money transfer operators. The Bank continued to have a market leadership position
in Travel Currency Cards with 11 currency options other than INR being offered. The aggregate spends on Travel Currency
Cards have crossed USD 2 billion during the year. The volumes of retail remittances too have risen during the year and the



 20
Bank processed outward remittances
of USD 1.39 billion. Inward remittances                                                 ATM CHANNEL MIGRATION                                           533
accounted for USD 2.77 billion.                                                                                   11,864

                                                                                                                                                 373
The cards business of the Bank has                                                                           8,538
                                                                                                                                             314
grown steadily as an important and                                                                  6,834
                                                                                                                                    243
valuable adjunct to the deposit and
                                                                                           4,828                           203
loan businesses. The Bank offers a                                100
                                                                          125     4,124
wide range of payment solutions to its            80
                                                          86
                                            68
customers in the form of debit cards,
prepaid cards and credit cards. As on
31st March 2012, the Bank has a base of 2007-08 2008-09 Base (` in lakhs) 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12
                                                        2009-10 2010-11
                                                  Card                                   Cash Withdrawals (` in crores)        No. of Transactions (in lakhs)
approximately 124.99 lac debit cards,
placing it among the leading players in the country. The Bank is a dominant player in prepaid cards with a card base of
approximately 46.71 lac. The credit card base of the Bank on the 31st March 2012 was approximately 7.8 lac and covers a range
of retail and commercial credit cards.
‘Axis Bank Privée’, the brand name for exclusive private banking, gives its clients access to a variety of financial solutions that
includes advisory services, investment and lending solutions across 10 cities in the country. Privée follows a client-focused
investment process and a team-based approach for managing client relationships. The relationship management team is
supported by a team of product specialists, client servicing teams, investment consultants and research experts. The private
banking business focuses on addressing both the personal and corporate advisory needs of an entrepreneur or business family
by bringing solutions offered by various business groups across the retail and corporate businesses within the Bank under an
integrated platform. The Bank launched ‘Axis Bank Wealth’ in 2008-09 targeting customers who have a total relationship
value with the Bank of between `30 lacs and `200 lacs. The value proposition aims at delivering a ‘One Bank’ experience to
such customers and is positioned as a complete solution involving banking, investment and asset needs.
The Bank also distributes third party products such as mutual funds, Bancassurance products (life and general insurance), online
trading and gold coins through its branches. It is one of the leading banking distributors of mutual funds in India, covering
products of all major asset management companies. The Bank also distributes life insurance products of Max New York Life
Insurance Company and during the year, it sold more than 1.49 lac policies with a premium mobilisation of `653.91 crores. The
life insurance business of the Bank grew by 63% in terms of premium collected, recovering from the decline of 0.9% last year.
The general insurance business of the Bank, on the other hand, grew 23% in terms of premium collected. During the year, the
Bank has sold more than 3.55 lac general insurance policies. Customers have been provided with the option of renewing and/
or buying policies online through the Bank’s corporate website. The Bank has signed an agreement with Axis Securities and
Sales Ltd., a wholly-owned subsidiary, to provide Axis Direct, an online trading platform, to its customers. During the year, the
Bank opened more than 1.28 lac online trading accounts. The demand for gold and silver among retail and corporate clientele
is rising and the Bank offers gold and silver bars of the highest purity in various denominations to its customers.
In addition to its branch network of 1,622 branches and extension counters spread across 1,050 centres, the Bank added
3,654 ATMs during the year to reach 9,924 as on 31st March 2012 against 6,270 ATMs as on 31st March 2011. The Bank has
emerged as a pioneer in the transaction-based pricing model in total ATM outsourcing which envisages no capital expenditure
for the Bank. Under this model, payment is based on a pay-per-use model for the Bank’s customer transactions and a sharing
of revenue with the service provider {Independent ATM Deployer (IAD)} for other bank transactions. The Bank continues to
be the largest private sector bank and the 2nd largest bank in terms of the size of its ATM network in India. Along with the
ATM network, other alternate channels such as internet banking, mobile banking and phone banking, have also grown well
and a strong architecture of alternate channel has been created, providing higher levels of customer convenience and service
quality to customers. A new branch design policy envisages a self-service lobby at the entrance of the branch, which shall
house various facilities including ATMs, self-service kiosks and pass book printers. During the year 108 branches which have
such self-service lobbies commenced operations.
CORPORATE CREDIT

Capital expenditure, particularly in greenfield projects remained subdued through the year in view of the prevalent macro-
economic environment, with brownfield and smaller ticket projects and working capital loans driving demand for credit from



                                                                                                                                                              21
corporate customers. However, existing sanctions continued to witness disbursements, as the projects financed by banks drew
down on committed sanctions. The corporate credit portfolio of the Bank comprising advances to large and mid-corporates
(including infrastructure) grew by 20% to `91,053 crores from `75,922 crores last year. This includes advances at overseas
branches amounting to `24,890 crores (equivalent to USD 4.89 billion) comprising mainly the portfolio of Indian corporates
and their subsidiaries, as also trade finance. The relationship model introduced last year has shown good results and has
helped the Bank to improve its share of wallet due to a marked improvement in cross-selling a wide range of products to the
Bank’s corporate customers. The Bank’s focus on fee-based business, foreign exchange business and loan syndication paid
rich dividends as well. The Bank continually monitors portfolio diversification through tracking of industry, group and company
specific exposure limits. The entire portfolio is rated on the basis of a Credit Rating Tool, which facilitates appropriate credit
selection.

The Bank’s infrastructure business includes project and bid advisory services, project lending, debt syndication, project structuring
and due diligence, securitisation and structured finance. The Bank focused on leveraging its strength in infrastructure linked
financial services. The Bank successfully completed transactions across various sectors such as telecom, power generation,
transmission and distribution, roads, ports, airports, urban transport and railways, education and healthcare etc. As on 31st
March 2012, the Bank’s advances to infrastructure stood at `19,321 crores against `15,723 crores last year, thereby increasing
23%. This includes advances from the Bank’s overseas branches of `4,769 crores (equivalent to USD 937 million). As one of the
leading players in infrastructure lending, the Bank launched its first ever ‘D&B-Axis Bank Infra Awards 2011’ in association with
Dun & Bradstreet. The award felicitates leading infrastructure projects and infrastructure companies. As part of promotional
activities, the Bank also organised a quarterly Breakfast Series, involving various industry leaders.

In October 2010, the Bank has launched the Axis Infra Index (AII) with the primary objective of conveying a sense of investment
conditions in the infrastructure sector. The Index, as a composite measure of investor confidence, comprises four components:
flow of equity and debt funds into infrastructure sectors, project completion and commencement of operations, output
related to infrastructure segments and regulatory and policy developments relevant for the sector. It is designed to capture
the evolving fundamentals of the sector and is updated and disseminated on a quarterly basis.

The mid-corporate group continues to be an important business segment of the Bank with total advances of `17,365 crores
as on 31st March 2012, registering a growth of 10% over last year. The focus continues to be on targeting opportunities in
industries with lower coverage but having positive outlook across geographies without compromising on quality. The Bank
caters to the ever increasing financial requirements of this segment by offering both off-the-shelf and complex, transactional
solutions. Existing client relationships are maintained through active cross-selling of products and services in corporate and
retail banking space.

TREASURY

The Bank has an integrated Treasury, covering both domestic and global markets, which manages the Bank’s funds across
geographies. The Bank’s treasury business has grown substantially over the years, gaining market share and continuing to
be among the top five banks in terms of forex revenues. The Treasury plays an important role in the sovereign debt markets
and participates in the primary auctions held by RBI. It also actively participates in the secondary government securities and
corporate debt market. The foreign exchange and money markets desk is an active participant in the inter-bank/FI space. The
Bank has been exploring various cross-border markets to augment resources and support customer cross-border trade.

The Bank has emerged as one of the leading providers of foreign exchange and trade finance services. It provides a gamut
of products for exports and imports as well as retail services. Its cutting edge technology provides comprehensive and timely
customer services.

The Bank is a dominant player in placement and syndication of debt issues. During the year, the Bank arranged debt aggregating
`40,500 crores and received several awards in recognition of its position in this business. While the volume of syndication
vis-à-vis the past year has declined in line with the prevalent market trend in the economy, the Bank continued to maintain
the leadership position in the market. For the calendar year 2011, it was identified as the no.1 Debt Arranger by Bloomberg,
the Best Domestic Debt House in India by Asia Money, Best Bond House in India by Finance Asia, Best Debt House in India by
Euromoney, Best Domestic Bond House in India by the Asset Triple A Country Awards by Asset Magazine and as no.1 Debt
Arranger for Private Placements by Prime Database for the nine months ended December 2011.




 22
BUSINESS BANKING

Business Banking leveraged the Bank’s strengths – its well distributed network of branches and a strong technology platform
to offer the best in transaction banking services. The Bank has consistently targeted the procurement of low-cost funds
by offering a range of current account products and cash management solutions across all business segments covering
corporates, institutions, central and state government ministries and undertakings as well as small and retail customers. The
cross-selling of transactional banking products have also succeeded in enlarging the customer base and growing current
account balances. Due to change in business approach from a product-centric to a customer-centric model, the Bank has
formed the Corporate Accounts Group within the Business Banking to meet the product specific, transactional banking and
service requirements of large and mid-corporates and financial institutions. The sourcing of the current accounts is one of the
key enablers for the growth of the balance sheet. As on 31st March 2012, current account balances stood at `39,754 crores
against `36,917 crores last year, increasing 8% yoy. On a daily average basis, current accounts balances grew by 17% to
`27,403 crores compared to `23,479 crores last year.

In order to provide solutions to business to effectively manage their funds flow, new products have been introduced. A
liquidity management solution was launched to facilitate corporate customers with better funds management. Similarly, a
single window for all payment requirements was launched with several advanced features such as setting a daily transaction
limit for corporate users, setting transaction limits for individual beneficiaries, prioritising payment methods, online stop
payment and cancellation facilities.

Cash Management Service (CMS) continued to constitute an                                                            11,548
important source of fee income and contributed significantly to                             CMS GROWTH
generate low cost funds. The Bank is one of the top CMS providers                                         8,465
in the country and the number of CMS clients has grown to 11,548
from 8,465 last year. During the year, the number of locations                                   6,614

covered under CMS increased from 692 last year to 801. During
                                                                                    4,852
the year, the Bank handled 105 IPOs and 444 dividend mandates
against 101 IPOs and 434 dividends mandates last year.                   3,193

The Bank acts as an agency bank for transacting government
business offering services to various central government ministries/
departments and other state governments and union territories.          2007-08     2008-09     2009-10        2010-11 2011-12
The Bank accepts income and other direct taxes through its 214                              No. of CMS Clients
authorised branches at 137 locations and central excise and service
taxes though its 56 authorised branches at 14 locations including e-Payments. It also handles the disbursement of civil pension
through all its branches and defence pension through 151 authorised branches. In addition, the Bank provides collection and
payment services to 4 central government ministries/departments and 8 state governments and union territories. The Bank
is associated with 9 state governments towards undertaking Electronic Benefit Transfer (EBT) projects for disbursement of
government benefits (wages under MGNREGS and Social Security Pension (SSP)) through direct credit to beneficiary bank
accounts under smart card based IT enabled financial inclusion model. The total government business throughput during the
year was `94,314 crores against `85,423 crores last year.

The Bank is a SEBI registered custodian and offers custodial services to both domestic and offshore customers. As on
31st March 2012, the Bank held assets worth approximately `11,840 crores under its custody, registering a growth of 331%
over last year. The Bank launched its merchant acquiring business in December 2003, and in the last eight years has emerged
as one of the largest acquirers in the country with an installed base of 2.02 lac point-of-sale terminals. The Bank has been in
the forefront in terms of technological advancements and is the market leader in providing dual APN solutions for transaction
acceptance on GPRS platform. It is also the first bank in India to launch cards acceptance services in the radio taxi segment,
and to acquire cards in metro railways through PCPOS for the Delhi Airport Metro Express.

INVESTMENT BANKING

The Bank’s Investment Banking business comprises activities relating to Equity Capital Markets, Mergers and Acquisitions
and Private Equity Advisory. The Bank is a SEBI-registered Category I Merchant Banker and has been fairly active in advising




                                                                                                                             23
Indian companies in raising equity through IPOs, QIPs, Rights issues etc. The Bank has built strong relationships with Indian
companies thereby becoming an effective bridge between such corporates and FIIs, DIIs and domestic retail investors.

During the financial year ended 31st March 2012, the Bank undertook 9 transactions including 5 IPOs and 2 Open Offers
aggregating approximately `8,750 crores. M&A advisory services focus on domestic and cross-border buy and sell mandates
for Indian clients. In the financial year 2011-12, the Bank successfully closed a sell-side mandate with a valuation of `55 crores.
The private equity business works with the Bank’s mid-corporate and SME clients and advises them in raising capital from
private equity investors.

LENDING TO SMALL AND MEDIUM ENTERPRISES

The Small and Medium Enterprises (SME) segment has been identified as a thrust area of the Bank. The business approach
towards this segment, which is expected to contribute significantly to economic growth in future, is to build relationships
and nurture the entrepreneurial talent available. The relationship based approach enables the Bank to deliver value through
the entire life cycle of SMEs, creating enormous goodwill and stickiness. The Bank has segmented its SME business in three
groups: Small Enterprises, Medium Enterprises and Supply Chain Finance. Under the Small Business Group, a sub-group for
financing micro enterprises is also set up. This will help the Bank to optimally utilise available resources, build capacities and
bring in required levels of skill sets for processing and monitoring SME exposures. The Bank extends working capital, project
finance as well as trade finance facilities to SMEs. It also helps the Bank to fulfil its priority sector obligations and provides
cross-selling opportunities. During the year, advances to SME increased by 11% and stood at `23,795 crores as on 31st March
2012 as compared to `21,406 crores last year.

During the year, the Bank has set up 6 SME centres and SME cells each across the country, taking the total number to 32 SME
Centres. The Bank has organised ‘Business Gaurav SME Awards’ in association with Dun & Bradstreet to recognise and award
achievements in the SME space. It also organised several road shows and knowledge series meetings at 28 SME centres.

AGRICULTURE

The Bank continued to drive and expand the flow of credit to the agricultural sector. The Bank also made its presence in
the hinterland by offering banking products to the rural population. 401 branches of the Bank had dedicated officers for
providing farm loans. Products and solutions were created specifically with simple features and offered at affordable rates to
attract more customers. The Bank has also adopted a value-chain approach, wherein end-to-end solutions are being provided
for various stakeholders. It also offers various customised solutions to meet the regional requirements. The business was
driven through 85 strategically located clusters, and dedicated teams for sales and services were created to complement with
specialised credit and operations support.

During this fiscal, agriculture advances grew by 0.11% to `17,340 crore, constituting 12% of the Bank’s domestic advances.
As on the last Friday of March 2012, the direct agriculture lending was 9.76% of the adjusted net bank credit of the Bank.

FINANCIAL INCLUSION

The Bank perceives financial inclusion (FI) not as a corporate social responsibility or a regulator driven initiative but as a large
business opportunity that lies untapped in the rural and unexplored section of the urban market. Till March 2012, the Bank
has opened over 4.4 million No-Frills accounts in over 7,607 villages through a network of 15 Business Correspondents and
nearly 6,000 customer service points. The Bank has a strong presence in the Electronic Benefit Transfer (EBT) space and has
covered around 6,800 villages across 19 districts and 9 states till date with over 3.7 million beneficiaries. In the rural financial
inclusion domain, the Bank has successfully executed its SLBC mandates for the financial 2011-12 and has opened over 45,000
accounts. In the urban space, the Bank has launched financial inclusion initiatives in Bangalore, Chennai and Delhi targeting
migrant labourers, slum dwellers and other under-banked sector of the urban population and has opened over 3.5 lac no-
frill accounts. The Bank’s financial inclusion efforts are not merely restricted to launching of financial inclusion initiatives
and sourcing basic No Frill accounts, but to also promote the savings habits and enable the customers to obtain customised
solutions for their financial needs. The Bank till date has sourced over 0.4 lac Micro insurance products (in both life and non-life
space) and has provided small value overdraft facility to nearly 5,000 customers on their No Frill accounts. The Bank also has




 24
a range of other customised products for this customer segment like different variants of Axis Uday no frills savings accounts,
Chhota RD, Chhota FD, and Chhota SIP. The Bank has been one of the first few banks to have tied-up with telecom companies
to offer remittance led financial inclusion services on the mobile platform.

INTERNATIONAL BANKING
The international operations of the Bank form a key enabler in its strategy to partner with the overseas growth potential of
its domestic clientele, who are venturing abroad or require non-rupee funds for domestic projects. During the year, the Bank
has extended its overseas network by opening a branch in Colombo, Sri Lanka. The Bank now has a foreign network of four
branches (Singapore, Hong Kong, DIFC (Dubai) and Colombo (Sri Lanka))and three representative offices (Shanghai, Dubai
and Abu Dhabi) with presence in six countries.
While corporate banking, trade finance, treasury and risk management solutions are the primary offerings through the
branches at Singapore, Hong Kong, DIFC (Dubai) and Colombo, the Bank also offers retail liability products from its branches
at Hong Kong and Colombo. Further, the Bank’s Gulf Co-operation Council (GCC) initiatives in the form of representative
offices in Dubai and Abu Dhabi, and alliances with banks and exchange houses in the Middle East provide the support for
leveraging the business opportunities emanating from the large NRI diaspora present in these countries.
With management of liquidity being a major challenge in the present global markets, the Bank consciously restrained its
asset growth at the overseas centers. As on 31st March 2012, the total assets at overseas branches stood at USD 6.35 billion
compared to USD 5.30 billion last year.
Axis U.K. Limited, the UK subsidiary of the Bank, continued its interactions with the Financial Services Authority (FSA), UK and
other relevant authorities for regulatory approvals to enable setting up of the banking subsidiary of the Bank in UK.
RISK MANAGEMENT
Banking is the business of managing risks and the objective of risk management is to balance the trade-off between risk and
return and ensure optimum risk adjusted return on the capital. It entails the identification, measurement and management
of risks across the various businesses of the Bank. Risk is managed through a framework of policies and principles approved
by the Board of Directors and supported by an independent risk function that ensures that the Bank operates within its risk
appetite. The risk management function attempts to anticipate vulnerabilities at the transaction level or at the portfolio
level, as appropriate, through quantitative or qualitative examination of the embedded risks. The Bank continues to focus on
refining and improving its risk measurement systems not only to ensure compliance with regulatory requirements, but also to
ensure better risk adjusted return and optimal capital utilisation keeping in view the business objectives.
Governance Structure of Risk Management
The Board of Directors sets the overall risk appetite and philosophy for the Bank. The Bank’s risk management processes
are guided by well-defined policies appropriate for the various risk categories viz. credit risk, market risk, operational risk
and liquidity risk supplemented by periodic validations of the methods used and monitoring through the sub-committees
of the Board. The Risk Management Committee (RMC), which is a sub-committee of the Board, reviews various aspects of
risk arising from the businesses undertaken by the Bank. The Committee of Directors and the Audit Committee of the Board
supervises certain functions and operations of the Bank, which ultimately enhances the risk and control governance framework
within the Bank. Various senior management credit and investment committees namely Credit Risk Management Committee
(CRMC), Asset-Liability Committee (ALCO), and Operational Risk Management Committee (ORMC) operate within the broad
policy framework of the Bank.
Credit Risk
Credit risk is the risk of financial loss if a client, issuer of securities that the Bank holds or any other counterparty fails to meet
its contractual obligations. Credit risk arises from all transactions that give rise to actual, contingent or potential claims against
any counterparty, borrower or obligor. The goal of the credit risk management is to maximise the Bank’s risk-adjusted rate
of return on capital by maintaining a healthy asset portfolio and managing the credit risk inherent in individual exposures as
well at the portfolio level. The emphasis is placed, both, on evaluation and containment of risk at the individual exposures and
analysis of the portfolio behaviour. The Bank has structured and standardised credit approval processes, which include a well-
established procedure of comprehensive credit appraisal. Every extension of credit facility or material change to a credit facility




                                                                                                                                  25
to any counterparty requires credit approval at the appropriate authority level. Internal risk rating remains the foundation of
the credit assessment process which provides standardisation and objectivity to the process. The sanctioning process is linked
to the rating and the size of exposure. The monitoring frequency applicable to the exposure also depends on the rating of
the exposure. Sector specific caps are laid down in the Credit Policy to avoid concentration risk. For retail portfolio including
small businesses and small agriculture borrowers, the Bank uses different product specific scorecards. Both credit and market
risk expertise are combined to manage risk arising out of traded credit products such as bonds and market related off-balance
sheet transactions. Model validation is carried out periodically by objectively assessing its discriminatory power, calibration
accuracy and stability of ratings.
The Bank continuously monitors portfolio concentrations by segment, borrower, groups, industry and geography, where
applicable. Portfolio level delinquency matrices are tracked at frequent intervals with focus on detection of early warning
signals of stress. Key sectors are analysed in detail to suggest strategies for business, considering both risks and opportunities.
The RMC periodically reviews the impact of the stress scenarios resulting from the rating downgrades, or drop in the asset
values in case of secured exposures, on the portfolio. The portfolio level risk analytics provide insight into the capital allocation
required to absorb unexpected losses at a defined confidence level.
Market Risk
Market Risk is the risk of losses in ‘on and off-balance sheet’ positions arising from the movements in market level of interest
rates, prices of securities, foreign exchange rates and equities as well as the volatilities of those changes, which may impact
the Bank’s earnings and capital. The risks may pertain to interest rate related instruments (Interest rate risk), equities (Equity
price risk) and foreign exchange rate risk (Currency risk). Market Risk for the Bank emanates from its trading and investment
activities, which are undertaken both for the customers and on a proprietary basis. The Bank adopts a comprehensive approach
to market risk management for its banking book as well as trading book for both its domestic and overseas operations.
The market risk management framework of the Bank aims to maximise the risk adjusted rate of return of the Bank’s trading
and investment portfolio by providing inputs regarding the extent of market risk exposures, the performance of portfolios vis-
à-vis the risk exposure and comparable benchmarks. The market risk management of the trading, investment and asset/liability
portfolios of the Bank include well laid down policies, guidelines, processes and systems for the identification, measurement,
monitoring of limits set in accordance with risk appetite of the Bank and reporting of various market risks in the banking and
trading book. The Bank uses both statistical measures and non-statistical measures for the market risk management. The
statistical measures include Value at Risk (VaR), stress tests, back tests and scenario analysis while position limits, marked-to-
market (MTM), stop-loss limits, alarm limits, gaps and sensitivities (duration, PVBP, option greeks) are used as non-statistical
measures of market risk management.
The Bank uses historical simulation and its variants for computing VaR for its trading portfolio. VaR of a portfolio is defined as
the potential loss value such that, given a confidence level (probability), the cumulative mark-to-market loss on the portfolio
over a given time horizon does not exceed acceptable levels (assuming normal market conditions and no trading in the
portfolio). VaR is calculated at a 99% confidence level for a one-day holding period. The VaR models for different portfolios
are back-tested on an ongoing basis and the results are used to maintain and improve the efficacy of the model. The Bank
supplements the VaR measure with a series of stress tests and sensitivity analysis as per a well laid out stress testing framework.
Liquidity Risk
Liquidity risk management is the ability of a bank to fund increases in assets and meet obligations as they become due,
without incurring unacceptable losses. Liquidity risk is the current and prospective risk to earnings or capital arising from a
bank’s inability to meet its current or future obligations on the due date. Liquidity risk is two-dimensional: risk of being unable
to fund portfolio of assets at appropriate maturity and rates (liability dimension) and the risk of being unable to liquidate assets
in a timely manner at a reasonable price (asset dimension). The Bank’s Asset Liability Management (ALM) Policy lays down a
broad framework for liquidity risk management to ensure that the Bank is in a position to meet its daily liquidity obligations as
well as to withstand a period of liquidity stress, the source of which could be bank-wide, market-wide or both. The liquidity
profile of the Bank is analysed on a static as well as on a dynamic basis by using the gap analysis technique supplemented by
monitoring of key liquidity ratios and conduct of liquidity stress tests periodically. The liquidity position is managed on a global
basis including positions at the overseas branches. The Bank has laid down liquidity risk policies for its overseas branches in
line with host country regulations and the ALM framework as stipulated for domestic operations. Periodical liquidity positions
and liquidity stress results of overseas branches are reviewed by the Bank’s ALCO along with domestic positions.



 26
Operational Risk

To manage operational risk in an effective, efficient and proactive manner, the Bank has put in place an Operational Risk
Management (ORM) Policy. The objective of the ORM Policy is to identify the operational risks that the Bank is exposed to.
These risks may emanate from inadequate and/or missing controls in internal processes, people, systems or from external
events or a combination of all the four. The policy also aims at assessing and measuring the magnitude of risks, monitoring,
controlling and mitigating them by using a variety of processes.

The Bank is in the process of setting up a comprehensive Operational Risk Measurement System (ORMS) through technological
solutions. Once implemented, these solutions will enable the Bank to migrate to the Advanced Measurement Approach (AMA)
for the calculation of capital charge for operational risk. In addition to the ORM Policy, an Operational Risk Management
Framework (ORMF), loss data collection methodology, risk and control self-assessment framework, key risk indicators framework
as well as role and responsibilities of operational risk management function are approved by the Risk Management Committee.
Operational Risk Management Committee (ORMC) oversees the implementation of the aforesaid framework and policies.

Within the ORM framework, new products, processes and services introduced by the Bank are subjected to rigorous risk
evaluation and approval accorded by the Product Management Committee where all relevant risks are identified and assessed
by the departments independent of the risk-taking unit (product/process/service owner). Similarly, changes proposed in
the existing product/processes/services are also subjected to review by the Change Management Committee. Outsourcing
arrangements are examined and approved by the Outsourcing Committee. The IT Security Committee of the Bank provides
directions for mitigating the operational risk in the information systems. The Bank has also created a Continuous Off-site
Monitoring (COSMOS) group for off-site surveillance and monitoring of transactions to detect and mitigate frauds on a
proactive basis. The Bank has put in place a Business Continuity Plan for all the critical applications.

OPERATIONS

The business model of the Bank has separated production and distribution functions within the Bank, with transaction
processing and customer databases (production technology) becoming increasingly centralised and product sales and
customer handling (the distribution technology) being the primary function at the branches. The separation of functions has
helped reduce transaction costs besides ensuring smoothness in operations and increasing productivity. Operational processes
were constantly refined during the year from the perspective of implementation of best practices, risk identification and
containment. Operational instructions were revisited on a continual basis and efforts were made to minimise risks at branches.

Retail Banking Operations

Retail Banking Operations (RBO) provides seamless service to retail customers while ensuring secure and compliant systems
for risk containment and regulatory compliance. The Bank continued to strengthen the oversight function through centralised
monitoring of the working of the branches in respect of KYC, AML and other regulatory compliances, cash management,
clearing operations and internal housekeeping with the objective of ensuring compliance with risk guidelines and delivering
operational efficiency and customer service. To ensure enhanced customer service and better handling of cash, the Bank has
installed note sorting machines at cash intensive branches. The Bank has implemented the Clean Note Policy of RBI across all
branches of the Bank. The Bank has been appointed as the Primary Clearing House at certain places. A currency chest was
operationalised at Guwahati, making the first private sector bank, to have a currency chest in the North East.

Wholesale Banking Operations

The Wholesale Banking Operations (WBO) is responsible for providing best in class services to non-retail customers of the
Bank through four verticals: Corporate Banking Operations, Treasury Operations, Trade and Forex Operations, and Centralised
Collection and Payment Hub.

The Corporate Banking Operations (CBO) involves delivery, control, monitoring and administration of credit facilities of large
and mid-corporates, SME, corporate agriculture, channel finance and micro finance transactions. CBO operates through a
network comprising of Corporate Banking Branches (CBBs)/Credit Management Centres (CMCs) at 8 major cities, 52 Mini-
Credit Management Centres (MCMCs) at Tier II cities, and Corporate Credit Operations Hub (CCOH) at Hyderabad. Treasury
Operations provides operational support to the Bank’s Treasury and operates the centralised electronic payment hubs for
RTGS and NEFT. Trade and Forex Operations (TFO) supervise and control the entire cross border trade and foreign exchange




                                                                                                                         27
operations of the Bank. TFO provides trade finance and retail forex services to corporates, full-fledged money changers
(FFMCs) and individuals through 197 B-category branches and state-of-the-art centralised knowledge processing centres viz.
‘Trade Finance Centres’ located at Mumbai and Hyderabad. TFO is also responsible for ensuring compliance of regulatory and
internal guidelines in respect of foreign exchange transactions of the Bank.

The Bank’s payment service is one of the key differentiating services for all customer segments. In order to enhance speed,
scalability and straight through processing by technological advancement, the Bank has launched a plan of introducing an
Enterprise Payment Hub to handle all types of payment services through a centralised and channel agnostic processing engine.

INFORMATION TECHONOLOGY

Technology is one of the key enablers for business and to deliver customised financial solutions. The Bank continued to focus on
introducing innovative banking services through investments in scalable and robust technology platforms that delivers efficient
and seamless services across multiple channels for customer convenience and cost reduction. The Bank has also focused on
improving the governance process in IT. The Bank has launched the Business Process Management System, a reusable system,
which helps to build process efficiencies across various areas of operations. To ensure optimal use of available resources, IT
infrastructure has been rationalised using the principles of server virtualisation and storage centralisation. To bring efficiency in
tracking and implementing various IT projects, a project governance framework at the Project Management Office has been
deployed as part of the role-based re-organisation. The Bank plans to migrate the production IT hardware to a co-location hosted
site at Mumbai, a state-of-the-art Tier IV compliant Data Center. An enterprise architecture function has also been introduced
for defining architectural principles and digitising the architecture related to infrastructure, application and achieving target
architecture. The Bank has undertaken various steps in order to align itself towards RBI guidelines on security and governance,
including setting up of Board and Executive level committees and working on IT operations and other key areas.

COMPLIANCE

The Compliance function of the Bank is responsible for monitoring and ensuring that operating and business units comply with
regulatory and internal guidelines. Its objective is the adoption of best practices and globally accepted standards of corporate
governance. The focal point of contact with RBI and other regulatory entities, the Compliance department periodically apprises
both the Bank’s management as well as the Board of Directors of the compliance status of the organization and changes in
regulatory environment.

Guidelines, notifications and directives issued by regulatory bodies during the year were disseminated through the Bank
to ensure that business and functional units operate within the compliance parameters set by the regulators. The level of
compliance is monitored through a Compliance Testing Programme. New products and processes launched during the year are
subjected to scrutiny to ensure that these did not violate any rules, laws and standards. The Bank has recently embarked upon
an Enterprise-wide Governance Risk and Compliance Framework, an online tool, which addresses operational, compliance
and financial reporting risks and helps in bringing efficiency in processes and improvement in compliance levels. Significant
aspects of the Bank’s compliance culture are the Whistleblower Policy and zero tolerance for fraud, corruption and financial
irregularities.

INTERNAL AUDIT

The Bank’s internal audit function performs an independent and objective evaluation of the adequacy and efficiency of
internal controls by undertaking a comprehensive risk-based audit of various operating units. It also undertakes internal-cum-
management audit of the Bank’s Corporate Office departments. The effort is to continuously benchmark against international
best practices and procedures in the area of internal control systems. It also provides direction to ensure timely mitigation of
risks faced by the Bank. The Internal Audit Department functions independently under the supervision of the Audit Committee
of the Board, which evaluates its performance and reviews effectiveness of the operational efficiency and regulatory controls
laid down by the Bank and RBI. The Bank has continued to follow the Control Self-Assessment (Self Audit) model, launched
two years ago, to take the branches to an improved compliance culture. The Bank has renewed its certificate under the ISO
9001-2008 Standards for three more years.

CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Bank has set up a Trust – the Axis Bank Foundation (ABF) to channel its philanthropic initiatives. The Foundation has
committed itself to participate in various socially relevant endeavours with a special focus on poverty alleviation, providing



 28
sustainable livelihoods, education of the underprivileged, healthcare, sanitation etc. The Bank has decided to contribute
upto one percent of its net profit annually to the Foundation under its CSR initiatives. For the financial year ended 31st March
2012, the Foundation has extended various grants aggregating `18.85 crores. During the year, the Foundation partnered
with 36 NGOs for educating over a lac underprivileged and special children in 13 states. The Foundation supported balwadis
(nurseries) and focused on early childhood programmes for 2-6 year olds living in slum areas, with special focus on the girl
child. The Foundation also focused on projects in supplementary education where the standard and quality of the education in
the schools are poor to ensure better performance and reduce school dropouts. The Foundation also supports various projects
to impart vocational training to the underprivileged youth. The Foundation works with Lifeline Foundation for providing
highway trauma care and rural medical relief in the states of Maharashtra, Kerala, Gujarat and Rajasthan. It has provided aid
to more than 7,500 critical accident victims and more than 15,000 minor accident victims. The Foundation also worked with
an NGO to provide essential lifesaving medicines to the rural poor in the state of Odisha. The Foundation aims to provide one
million sustainable livelihoods to the underprivileged in some of the most backward regions of the country in the next five
years, with 60% of the beneficiaries being women. The Foundation also runs projects in skill development, water harvesting
and low-cost agricultural practices to enhance farm yield.
In line with the Bank’s initiative in Green Banking with the theme of ‘Reduce, Reuse and Recycle’, the Foundation carried out
a recycling initiative at the Corporate Office. This initiative has helped the Bank to productively use around 21,572 kilograms
of dry waste during the year. The Foundation has partnered with an organisation for other such recycling activities. Under the
Axis Bank Engagement Programme, each department at the Corporate office has an ABF Champion to look after the initiatives
of the Foundation in their respective departments. Under the aegis of ‘Basket of Hope’, the Bank runs collection drives for
clothes, books and toys for distribution to the needy. The Bank holds regular exhibitions at the Corporate Office and branches
to provide a platform to NGOs for exhibiting their products. The Bank has launched an employee payroll programme titled
‘Axis Cares’, in which 3,661 officers of the Bank have enrolled as on 31st March 2012 and their monthly collection stands at
`7.52 lacs. The funds collected under this programme are utilised for the programs of the Foundation.
HUMAN RESOURCES
The Bank aims in creating and developing human capital to realise
                                                                                                       INTELLECTUAL CAPITAL
its vision of nurturing a mutually beneficial relationship with                                                3% 2%
                                                                                                          7%
its employees. Employee engagement and learning, leadership
development, enhancing productivity and building multiple
communication platforms thus occupied centre stage in the Bank’s
HR objective during the year. ‘eVoices’ held to measure Organisation
Health Index (OHI) showed an overall improvement of 11% and 10-
15% positive shift on all attributes as compared to last year.                                                                 48%
                                                                                                 40%

The Bank has tied up with training and educational institutions to
build alternate pipelines for recruiting trained manpower through
a cost-effective and time-efficient process. The Bank continues to        CA/CS/ICWA/CFS    Graduates/Post Graduate     MBA/Masters
maintain a strong employer brand in the financial services sector           ENGG./TECHNICAL     Ph.D/Doctorate/Bankers/Law Degree/CAIIB
especially on the campuses of the premier business schools of
                                                        the country. In a major initiative, the Bank launched Axis Academic
                    PROFILE BY AGE
                       3.00% 1.00%                      Interface Program (AAIP) with the 2-fold purpose: building long-term
                                       15.00%
                                                        partnership with Institutions to offer youngsters an understanding
                                                        about the financial services industry, and creating ‘Axis Bankers’.
          27.00%
                                                        So far, the Bank has tied up with Manipal University, NIIT, IFBI and
                                                        Guwahati University. The Bank’s ‘Axis Ahead’ initiative (the Bank’s
                                                        Management Trainee Program) in the Business schools received a
                                                        very high score in the AC Nielson Survey.
                                                         54.00%           The total employee strength of the Bank stood at 31,738 as compared
                                                                          to 26,435 in the previous year. The Bank has a young workforce with
                    Below 25 Years    Above 25 yrs to 30 yrs              an average age of 29 years. The equal opportunity employer policy of
       Above 31 yrs to 40 yrs   Above 41 yrs to 50 yrs     Above 50 yrs   the Bank contributes strongly to the Axis Bank brand.




                                                                                                                                         29
The Bank has set up a robust but leaner performance management process in order to monitor and improve employee
performance and productivity. The Bank has defined Axis Leadership Practices (ALP) for all levels to promote desired
behavioural competencies. The ALP is integrated with performance management process and overall development plan of the
Bank to build and nurture leaders.
In order to support its consistent growth, the Bank has developed a learning infrastructure to ensure availability of a skilled and
equipped workforce. The training calendar has been aligned to the Balanced Score Card of the departments. A comprehensive
e-learning module is being developed in-house and administered through the Bank’s intranet. The Faculty-in-Residence
programme has been launched in order to utilise in-house expertise for training purposes.
The Bank provides multiple opportunities and platforms to seamlessly connect across the geographies through its leadership
team at all levels. iAxis, the Bank’s Intranet is a platform to involve and engage with all officials through multi-dimensional
initiatives. The ABBI (Axis Bank Best Idea) initiative has strengthened the ‘idea generation’ process in the Bank and in 2011-
12, employees contributed more than 2,000 ideas related to banking and affiliated financial services. The winning ideas are
recognised and refined to be implemented by the related business and support functions.

CORPORATE OFFICE

Axis House, the Bank’s Corporate Office received the ‘Platinum’ rating by the US Green Building Council for its environment-
friendly facilities and reduction of carbon emission.




 30
AUDITORS’ REPORT
TO THE MEMBERS OF
AXIS BANK LIMITED
1. We have audited the attached Balance Sheet of AXIS BANK LIMITED (“the Bank”) as at 31 March, 2012, the Profit and
    Loss Account and the Cash Flow Statement of the Bank for the year ended on that date, both annexed thereto. These
    financial statements are the responsibility of the Bank’s Management. Our responsibility is to express an opinion on these
    financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require
    that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
    of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the
    disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant
    estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that
    our audit provides reasonable basis for our opinion.
3. The Balance Sheet and the Profit and Loss Account are drawn up in conformity with Forms A and B (revised) of the Third
    Schedule to the Banking Regulation Act, 1949, read with Section 211 of the Companies Act, 1956.
4. Without qualifying our report, we invite attention to Note 1(a) of Schedule 18 regarding the Scheme of Arrangement for
    the demerger of Enam Securities Private Ltd. with the Bank’s subsidiary. For the reasons stated therein, no effect to the
    proposed Scheme has been given in the accounts.
5. We further report as follows :
    (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary
         for the purposes of our audit and have found them to be satisfactory;
    (b) in our opinion, the transactions of the Bank which have come to our notice have been within its powers;
    (c) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our
         examination of those books;
    (d) the financial accounting systems of the Bank are centralised and, therefore, accounting returns are not required to
         be submitted by the Branches;
    (e) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement
         with the books of account;
    (f) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report
         comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956, insofar as they
         apply to banks;
    (g) in our opinion and to the best of our information and according to the explanations given to us, the said accounts
         give the information required by the Companies Act, 1956 in the manner so required for banking companies and the
         Guidelines issued by the Reserve Bank of India from time to time and give a true and fair view in conformity with the
         accounting principles generally accepted in India :
         (i) in the case of the Balance Sheet, of the state of the affairs of the Bank as at 31 March, 2012;
         (ii) in the case of the Profit and Loss Account, of the profit of the Bank for the year ended on that date and
         (iii) in the case of Cash Flow Statement, of the cash flows of the Bank for the year ended on that date.
6. On the basis of the written representations received from the Directors as on 31st March, 2012 and as per the information
    and representation provided to us by the Bank, taken on record by the Board of Directors, we report that none of the
    Directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of Section 274(1)(g) of the
    Companies Act, 1956.
7. We report that during the course of our audit we have visited 56 Branches. Since the key operations of the Bank are
    completely automated with the key applications integrated to the core banking systems, the audit is carried out centrally
    at the Head Office as all the necessary records and data required for the purposes of our audit are available therein and
    the Branches are not required to submit any financial returns.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No: 117365W)

Z. F. Billimoria
Partner
(Membership No. 42791)
Place : Mumbai,
Date : 27th April, 2012



                                                                                                                           31
AXIS BANK LIMITED - BALANCE SHEET
BALANCE SHEET AS AT 31 MARCH, 2012

                                                                                               As at                As at
                                                                                          31-03-2012          31-03-2011
                                                                      Schedule No. (` in Thousands)     (` in Thousands)
CAPITAL AND LIABILITIES
Capital                                                                          1          4,132,039          4,105,458
Reserves & Surplus                                                               2        223,953,384      185,882,797
Deposits                                                                         3    2,201,043,033      1,892,378,010
Borrowings                                                                       4        340,716,721      262,678,824
Other Liabilities and Provisions                                                 5         86,432,757       82,088,627
TOTAL                                                                                 2,856,277,934       2,427,133,716
ASSETS
Cash and Balances with Reserve Bank of India                                     6        107,029,214      138,861,630
Balances with Banks and Money at Call and Short Notice                           7         32,309,943        75,224,929
Investments                                                                      8        931,920,859      719,916,208
Advances                                                                         9    1,697,595,386      1,424,078,286
Fixed Assets                                                                    10         22,593,250        22,731,456
Other Assets                                                                    11         64,829,282        46,321,207
TOTAL                                                                                 2,856,277,934       2,427,133,716
Contingent liabilities                                                          12    4,802,373,747      4,453,914,432
Bills for collection                                                                      346,346,043       324,731,072
Significant Accounting Policies and Notes to Accounts                      17 & 18
Schedules referred to above form an integral part of the Balance Sheet


In terms of our report attached.                                                              For Axis Bank Ltd.



For Deloitte Haskins & Sells                                                                  Adarsh Kishore
Chartered Accountants                                                                         Chairman


Z. F. Billimoria              K. N. Prithviraj      V. R. Kaundinya        S. B. Mathur       Shikha Sharma
Partner                       Director              Director               Director           Managing Director & CEO


P. J. Oza                     Somnath Sengupta
Company Secretary             Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai



 32
AXIS BANK LIMITED - PROFIT & LOSS ACCOUNT
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2012

                                                                                           Year ended            Year ended
                                                                                            31-03-2012           31-03-2011
                                                                        Schedule No. (` in Thousands)      (` in Thousands)
I   INCOME
    Interest earned                                                                 13       219,946,474      151,548,058
    Other income                                                                    14        54,202,163       46,321,338
    TOTAL                                                                                    274,148,637      197,869,396
II EXPENDITURE
    Interest expended                                                               15       139,769,024       85,918,230
    Operating expenses                                                              16        60,070,995       47,794,281
    Provisions and contingencies                                             18 (2.1.1)       31,886,564       30,271,979
    TOTAL                                                                                    231,726,583      163,984,490
III NET PROFIT FOR THE YEAR (I - II)                                                          42,422,054       33,884,906
    Balance in Profit & Loss Account brought forward
    from previous year                                                                        49,697,707       34,274,337
IV AMOUNT AVAILABLE FOR APPROPRIATION                                                         92,119,761       68,159,243
V APPROPRIATIONS :
    Transfer to Statutory Reserve                                                             10,605,513        8,471,227
    Transfer to/(from) Investment Reserve                                                              -         (149,372)
    Transfer to Capital Reserve                                                                  519,047            47,630
    Transfer to General Reserve                                                                        -        3,388,491
    Proposed dividend (includes tax on dividend)                            18 (2.2.4)         7,700,725        6,703,560
    Balance in Profit & Loss Account carried forward                                          73,294,476       49,697,707
    TOTAL                                                                                     92,119,761       68,159,243
VI EARNINGS PER EQUITY SHARE                                                18 (2.2.2)
    (Face value `10/- per share) (Rupees)
    Basic                                                                                        102.94               82.95
    Diluted                                                                                      102.20               81.61
    Significant Accounting Policies and Notes to Accounts                     17 & 18
    Schedules referred to above form an integral part of the Profit and Loss Account


In terms of our report attached.                                                                 For Axis Bank Ltd.



For Deloitte Haskins & Sells                                                                     Adarsh Kishore
Chartered Accountants                                                                            Chairman


Z. F. Billimoria             K. N. Prithviraj        V. R. Kaundinya          S. B. Mathur       Shikha Sharma
Partner                      Director                Director                 Director           Managing Director & CEO


P. J. Oza                    Somnath Sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai



                                                                                                                       33
AXIS BANK LIMITED - CASH FLOW STATEMENT
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012

                                                                  Year ended          Year ended
                                                                   31-03-2012         31-03-2011
                                                            (` in Thousands)    (` in Thousands)

Cash flow from operating activities
Net profit before taxes                                          62,878,354         51,356,592
Adjustments for:
Depreciation on fixed assets                                      3,422,363          2,895,872
Depreciation on investments                                         580,985            992,677
Amortisation of premium on Held to Maturity Investments              627,967            605,613
Provision for Non Performing Assets (including bad debts)         8,604,298           9,551,195
Provision on standard assets                                       1,503,036          1,661,564
Provision for wealth tax                                               3,600              4,558
Provision for interest tax                                                  -             2,879
(Profit)/loss on sale of fixed assets (net)                        (203,026)             69,762
Provision for country risk                                            48,100             24,500
Provision for restructured assets                                   888,600             150,615
Provision for other contingencies                                  (198,354)            412,205
Amortisation of deferred employee compensation                              -             (186)
                                                                  78,155,923         67,727,846
Adjustments for:
(Increase)/Decrease in investments                             (165,599,005)       (35,371,797)
(Increase)/Decrease in advances                               (282,226,283)       (390,403,391)
Increase /(Decrease) in deposits                                308,665,023        479,375,834
(Increase)/Decrease in other assets                             (15,673,352)        (5,450,468)
Increase/(Decrease) in other liabilities & provisions              1,757,949        17,664,930
Direct taxes paid                                               (23,349,523)       (19,292,248)
Net cash flow from operating activities                         (98,269,268)       114,250,706
Cash flow from investing activities
Purchase of fixed assets                                         (3,843,375)       (13,602,967)
(Increase)/Decrease in Held to Maturity Investments             (48,104,626)      (126,380,416)
Proceeds from sale of fixed assets                                  762,243             130,076
Net cash used in investing activities                           (51,185,758)      (139,853,307)




 34
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012
                                                                                          Year ended            Year ended
                                                                                           31-03-2012           31-03-2011
                                                                                    (` in Thousands)      (` in Thousands)

Cash flow from financing activities

Proceeds from issue of subordinated debt, perpetual debt & upper Tier II
instruments (net of repayment)                                                             35,808,360         (1,625,906)

Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual
debt & upper Tier II instruments)                                                           42,229,536        92,609,218

Proceeds from issue of share capital                                                            26,581              53,717

Proceeds from share premium                                                                  1,336,820          2,353,987

Payment of dividend                                                                         (6,697,611)       (5,694,110)

Net cash generated from financing activities                                                72,703,686        87,696,906

Effect of exchange fluctuation translation reserve                                           2,003,938           (46,833)

Net increase in cash and cash equivalents                                                  (74,747,402)       62,047,472

Cash and cash equivalents at the beginning of the year                                     214,086,559       152,039,087

Cash and cash equivalents at the end of the year                                           139,339,157       214,086,559

Note :
1.    Cash and cash equivalents comprise of cash on hand (including foreign currency notes), balances with Reserve Bank of
      India, balances with banks and money at call & short notice (Refer Schedules 6 and 7 of the Balance Sheet).




In terms of our report attached.                                                               For Axis Bank Ltd.



For Deloitte Haskins & Sells                                                                   Adarsh Kishore
Chartered Accountants                                                                          Chairman


Z. F. Billimoria             K. N. Prithviraj        V. R. Kaundinya        S. B. Mathur       Shikha Sharma
Partner                      Director                Director               Director           Managing Director & CEO


P. J. Oza                    Somnath Sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




                                                                                                                      35
AXIS BANK LIMITED - SCHEDULES
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012

                                                                                                        As at               As at
                                                                                                   31-03-2012         31-03-2011
                                                                                            (` in Thousands)    (` in Thousands)
SCHEDULE 1 - CAPITAL
      Authorised Capital
      500,000,000 Equity Shares of `10/- each                                                     5,000,000          5,000,000
      Issued, Subscribed and Paid-up capital
      413,203,952 (Previous year - 410,545,843) Equity Shares of `10/- each fully paid-up          4,132,039          4,105,458
SCHEDULE 2 - RESERVES AND SURPLUS
I.    Statutory Reserve
      Opening Balance                                                                             27,820,350         19,349,123
      Additions during the year                                                                   10,605,513          8,471,227
                                                                                                 38,425,863          27,820,350
II.   Share Premium Account
      Opening Balance                                                                           100,050,790          97,695,255
      Additions during the year                                                                    1,336,820          2,355,535
      Less: Share issue expenses                                                                            -                   -
                                                                                                 101,387,610       100,050,790
III. Investment Reserve Account
      Opening Balance                                                                                       -           149,372
      Additions during the year                                                                             -                   -
      Less: Deductions during the year                                                                      -          (149,372)
                                                                                                            -                   -
IV. General Reserve
      Opening Balance                                                                              3,534,600            146,109
      Additions during the year [Refer Schedule 18 (2.1.31)]                                           8,500          3,388,491
                                                                                                   3,543,100          3,534,600
V.    Capital Reserve
      Opening Balance                                                                              4,905,935          4,858,305
      Additions during the year [Refer Schedule 18 (2.2.1)]                                          519,047             47,630
                                                                                                  5,424,982           4,905,935
VI. Foreign Currency Translation Reserve [Refer Schedule 17 (5.5)]
      Opening Balance                                                                              (126,585)            (79,752)
      Additions during the year                                                                    2,003,938            (46,833)
                                                                                                   1,877,353           (126,585)
VII. Balance in Profit & Loss Account                                                            73,294,476          49,697,707
      TOTAL                                                                                     223,953,384        185,882,797



 36
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012
                                                                                                     As at                As at
                                                                                                31-03-2012          31-03-2011
                                                                                         (` in Thousands)     (` in Thousands)
SCHEDULE 3 - DEPOSITS
A.    I.    Demand Deposits
            (i) From banks                                                                     20,980,835           14,305,111
            (ii) From others                                                                  376,559,884         354,865,812
      II.   Savings Bank Deposits                                                             516,679,577        408,503,090
      III. Term Deposits
            (i) From banks                                                                    100,943,739          76,750,855
            (ii) From others                                                                1,185,878,998       1,037,953,142
      TOTAL                                                                                 2,201,043,033       1,892,378,010
B.    I.    Deposits of branches in India                                                  2,094,495,868        1,826,772,021
      II.   Deposits of branches outside India                                                106,547,165          65,605,989
      TOTAL                                                                                 2,201,043,033       1,892,378,010

SCHEDULE 4 - BORROWINGS
I.    Borrowings in India
      (i)   Reserve Bank of India                                                               1,150,000                        -
      (ii) Other Banks #                                                                        4,472,000          14,237,000
      (iii) Other institutions & agencies **                                                  121,210,990          64,072,286
II.   Borrowings outside India $                                                              213,883,731         184,369,538
      TOTAL                                                                                   340,716,721         262,678,824
      Secured borrowing included in I & II above                                                          -                      -
      #     Borrowings from other banks include Subordinated Debt of `359.60 crores (previous year `364.60 crores) in the
            nature of Non-Convertible Debentures, Perpetual Debt of Nil (previous year Nil) and Upper Tier II instruments of
            `59.10 crores (previous year `59.10 crores) [Also refer Notes 18 (2.1.2) & 18 (2.1.3)]
      ** Borrowings from other institutions & agencies include Subordinated Debt of `8,391.70 crores (previous year
         `4,966.70 crores) in the nature of Non-Convertible Debentures, Perpetual Debt of `214.00 crores (previous year
         `214.00 crores) and Upper Tier II instruments of `248.40 crores (previous year `248.40 crores) [Also refer Notes 18
         (2.1.2) & 18 (2.1.3)]
      $     Borrowings outside India include Perpetual Debt of `234.03 crores (previous year `205.14 crores) and Upper Tier II
            instruments of `1,067.24 crores (previous year `935.30 crores) [Also refer Note 18 (2.1.3)]

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I.    Bills payable                                                                            30,853,220          37,445,308
II.   Inter - office adjustments (net)                                                                    -                      -
III. Interest accrued                                                                           6,478,322            4,143,337
IV. Proposed dividend (includes tax on dividend)                                                 7,681,950          6,678,836
V.    Contingent provision against standard assets                                               7,799,683          6,296,647
VI. Others (including provisions)                                                              33,619,582          27,524,499
      TOTAL                                                                                    86,432,757          82,088,627




                                                                                                                          37
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012
                                                                                                   As at                As at
                                                                                              31-03-2012          31-03-2011
                                                                                       (` in Thousands)     (` in Thousands)
SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I. Cash in hand (including foreign currency notes)                                           35,957,442          22,082,833
II. Balances with Reserve Bank of India :
    (i) in Current Account                                                                   71,071,772         116,778,797
    (ii) in Other Accounts                                                                            -                   -
    TOTAL                                                                                   107,029,214         138,861,630

SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
I. In India
    (i) Balance with Banks
         (a) in Current Accounts                                      3,516,323                                   4,407,510
         (b) in Other Deposit Accounts                                6,146,450                                  49,184,270
    (ii) Money at Call and Short Notice
         (a) With banks                                                       -                                      29,900
         (b) With other institutions                                          -                                           -
    TOTAL                                                             9,662,773                                  53,621,680
II. Outside India
    i) in Current Accounts                                            7,666,358                                   4,835,529
    ii) in Other Deposit Accounts                                     3,845,537                                  10,658,205
    iii) Money at Call & Short Notice                                11,135,275                                   6,109,515
    TOTAL                                                           22,647,170                                   21,603,249
    GRAND TOTAL (I+II)                                              32,309,943                                   75,224,929

SCHEDULE 8 - INVESTMENTS
I. Investments in India in -
    (i) Government Securities ## **                                                     584,162,116         441,549,553
    (ii) Other approved securities                                                                  -                   -
    (iii) Shares                                                                           7,399,921          6,928,717
    (iv) Debentures and Bonds                                                           231,507,877         180,704,920
    (v) Investment in Subsidiaries/Joint Ventures                                         3,495,500           2,595,500
    (vi) Others (Mutual Fund units, CD/CP, NABARD deposits, PTC etc.) @                  98,082,541          82,405,862
    Total Investments in India                                                          924,647,955         714,184,552
II. Investments outside India in -
    (i) Government Securities (including local authorities)                                1,170,306            429,340
    (ii) Subsidiaries and/or joint ventures abroad (amount less than `1,000 for
          current year and previous year)                                                           -                   -
    (iii) Others                                                                           6,102,598          5,302,316
    Total Investments outside India                                                        7,272,904          5,731,656
    GRAND TOTAL ( I + II )                                                              931,920,859         719,916,208
## Includes securities costing `4,427.15 crores (previous year `4,424.90 crores) pledged for availment of fund transfer
    facility, clearing facility and margin requirements
@     Includes priority sector shortfall deposits `5,100.53 crores (previous year `4,064.71 crores) and PTC’s `204.67 crores
      (previous year `212.98 crores) net of depreciation
** Inclusive of Repo Lending of `3,675.00 crores (previous year Nil) and net of Repo borrowing of `3,140.76 crores (previous
   year Nil) under the Liquidity Adjustment Facility in line with the RBI requirements




 38
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012
                                                                                                    As at               As at
                                                                                               31-03-2012         31-03-2011
                                                                                        (` in Thousands)    (` in Thousands)
SCHEDULE 9 - ADVANCES
A.   (i)   Bills purchased and discounted *                                                   39,089,332         34,812,948
     (ii) Cash credits, overdrafts and loans repayable on demand @                           468,608,528        349,803,398
     (iii) Term loans #                                                                    1,189,897,526      1,039,461,940
     TOTAL                                                                                 1,697,595,386      1,424,078,286
B.   (i)   Secured by tangible assets $                                                    1,417,163,384      1,131,026,880
     (ii) Covered by Bank/Government Guarantees &&                                            50,233,791         32,394,561
     (iii) Unsecured                                                                         230,198,211        260,656,845
     TOTAL                                                                                 1,697,595,386      1,424,078,286
C.   I.    Advances in India
           (i)   Priority Sector                                                             484,792,379        412,891,152
           (ii) Public Sector                                                                 32,535,626         30,039,403
           (iii) Banks                                                                          3,477,937         2,408,096
           (iv) Others                                                                       923,767,773        782,963,737
     TOTAL                                                                                 1,444,573,715      1,228,302,388
     II.   Advances Outside India
           (i)   Due from banks                                                                 1,127,900             4,196,520
           (ii) Due from others -
                 (a) Bills purchased and discounted                                            6,438,231          6,264,497
                 (b) Syndicated loans                                                        108,035,085         70,389,401
                 (c) Others                                                                  137,420,455        114,925,480
     TOTAL                                                                                   253,021,671        195,775,898
     GRAND TOTAL [ C I + C II ]                                                            1,697,595,386      1,424,078,286
*    Net of borrowings under Bills Rediscounting Scheme `3,480.00 crores (previous year `1,800.00 crores)
@    Net of borrowings under Inter Bank Participation Certificate `60.36 crores (previous year Nil)
#    Net of borrowings under Inter Bank Participation Certificate `7,968.24 crores (previous year `3,401.00 crores)
$    Includes advances against book debts
&& Includes advances against L/Cs issued by banks




                                                                                                                           39
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012
                                                                                                As at               As at
                                                                                           31-03-2012         31-03-2011
                                                                                    (` in Thousands)    (` in Thousands)
SCHEDULE 10 - FIXED ASSETS
I. Premises
     Gross Block
     At cost at the beginning of the year                                                  9,117,340             891,351
     Additions during the year                                                                96,841          8,244,785
     Deductions during the year                                                            (212,237)            (18,796)
     TOTAL                                                                                 9,001,944           9,117,340
     Depreciation
     As at the beginning of the year                                                         198,381            161,989
     Charge for the year                                                                     146,310             46,669
     Deductions during the year                                                             (82,455)            (10,277)
     Depreciation to date                                                                    262,236            198,381
     Net Block                                                                             8,739,708          8,918,959
II. Other fixed assets (including furniture & fixtures)
     Gross Block
     At cost at the beginning of the year                                                 25,147,573         20,188,424
     Additions during the year                                                             3,265,751          5,703,660
     Deductions during the year                                                          (1,578,538)           (744,511)
     TOTAL                                                                               26,834,786          25,147,573
     Depreciation
     As at the beginning of the year                                                     11,561,967           9,265,956
     Charge for the year                                                                  3,276,053           2,849,203
     Deductions during the year                                                          (1,149,102)           (553,192)
     Depreciation to date                                                                13,688,918          11,561,967
     Net Block                                                                           13,145,868          13,585,606
III. CAPITAL WORK-IN-PROGRESS (including capital advances)                                   707,674            226,891
     GRAND TOTAL (I+II+III)                                                              22,593,250          22,731,456


SCHEDULE 11 - OTHER ASSETS
I.    Inter-office adjustments (net)                                                                -                   -
II.   Interest Accrued                                                                    24,194,553         17,165,984
III. Tax paid in advance/tax deducted at source (net of provisions)                        1,185,052            401,429
IV. Stationery and stamps                                                                     12,623              11,794
V.    Non banking assets acquired in satisfaction of claims                                 262,681               53,174
VI. Others #                                                                              39,174,373        28,688,826
      TOTAL                                                                              64,829,282          46,321,207
# Includes deferred tax assets of `1,027.45 crores (previous year `816.85 crores)




 40
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2012
                                                                                                   As at               As at
                                                                                              31-03-2012         31-03-2011
                                                                                       (` in Thousands)    (` in Thousands)
SCHEDULE 12 - CONTINGENT LIABILITIES
I.    Claims against the bank not acknowledged as debts                                       2,602,138          2,344,295
II.   Liability for partly paid investments                                                            -                    -
III. Liability on account of outstanding forward exchange and derivative contracts :
      a)   Forward Contracts                                                             2,009,254,981      1,854,438,087
      b)   Interest Rate Swaps, Currency Swaps, Forward Rate Agreement
           & Interest Rate Futures                                                       1,752,490,787       1,647,016,628
      c)   Foreign Currency Options                                                        130,543,459        141,258,629
      TOTAL (a+b+c)                                                                      3,892,289,227      3,642,713,344
IV. Guarantees given on behalf of constituents
      In India                                                                             467,505,902        464,332,544
      Outside India                                                                         98,612,604          76,278,216
V.    Acceptances, endorsements and other obligations                                      302,612,607        249,276,960
VI. Other items for which the Bank is contingently liable                                    38,751,269         18,969,073
      GRAND TOTAL (I+II+III+IV+V+VI)                                                     4,802,373,747      4,453,914,432




                                                                                                                       41
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2012
                                                                                                 Year ended       Year ended
                                                                                                  31-03-2012      31-03-2011
                                                                                           (` in Thousands) (` in Thousands)
SCHEDULE 13 - INTEREST EARNED
I. Interest/discount on advances/bills                                                         153,793,526       104,031,107
II. Income on investments                                                                       63,942,666        44,386,841
III. Interest on balances with Reserve Bank of India and other inter-bank funds                    984,267         1,826,199
IV. Others                                                                                       1,226,015         1,303,911
     TOTAL                                                                                     219,946,474       151,548,058

SCHEDULE 14 - OTHER INCOME
I. Commission, exchange and brokerage                                                           43,417,022        33,574,183
II. Profit/(Loss) on sale of investments (net)                                                     728,329         3,663,189
III. Profit/(Loss) on sale of fixed assets (net)                                                   203,026           (69,762)
IV. Profit on exchange transactions/derivatives transactions (net)                               6,739,668         5,636,045
V. Income earned by way of dividends etc. from
     subsidiaries/companies and/or joint venture abroad/in India                                    11,250              7,500
VI. Miscellaneous Income                                                                         3,102,868          3,510,183
      [including recoveries on account of advances/investments/derivative receivables
      written off in earlier years `291.84 crores (previous year `325.22 crores) and net
      loss on account of portfolio sell downs/securitisation `1.60 crores (previous year
      net profit of `17.96 crores)]
      TOTAL                                                                                     54,202,163        46,321,338

SCHEDULE 15 - INTEREST EXPENDED
I. Interest on deposits                                                                        121,836,378        74,985,188
II. Interest on Reserve Bank of India/Inter-bank borrowings                                      2,319,578         1,609,768
III. Others                                                                                     15,613,068         9,323,274
     TOTAL                                                                                     139,769,024        85,918,230

SCHEDULE 16 - OPERATING EXPENSES
I. Payments to and provisions for employees                                                     20,801,677        16,139,001
II. Rent, taxes and lighting                                                                     6,564,159         6,798,464
III. Printing and stationery                                                                       934,980         1,095,968
IV. Advertisement and publicity                                                                    881,458           790,153
V. Depreciation on bank’s property                                                               3,422,363         2,895,872
VI. Directors’ fees, allowance and expenses                                                          8,397             5,758
VII. Auditors’ fees and expenses                                                                     9,267             7,500
VIII. Law charges                                                                                  182,725           133,752
IX. Postage, telegrams, telephones, etc.                                                         2,586,992         1,984,921
X. Repairs and maintenance                                                                       5,294,832         3,839,337
XI. Insurance                                                                                    2,312,956         1,849,490
XII. Other expenditure                                                                          17,071,189        12,254,065
      TOTAL                                                                                     60,070,995        47,794,281




 42
17 Significant accounting policies for the year ended 31 March, 2012
1     Background
      Axis Bank Limited (‘the Bank’) was incorporated in 1993 and provides a complete suite of corporate and retail banking
      products.
2     Basis of preparation
      The financial statements have been prepared and presented under the historical cost convention on the accrual basis
      of accounting, and comply with the generally accepted accounting principles, statutory requirements prescribed under
      the Banking Regulation Act, 1949, the circulars and guidelines issued by the Reserve Bank of India (‘RBI’) from time to
      time and the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, to the extent
      applicable and current practices prevailing within the banking industry in India.
3     Use of estimates
      The preparation of the financial statements in conformity with the generally accepted accounting principles requires the
      Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
      and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ
      from those estimates. The Management believes that the estimates used in the preparation of the financial statements
      are prudent and reasonable. Any revisions to the accounting estimates are recognised prospectively in the current and
      future periods.
4     Change in accounting estimates
      Change in estimated useful life of fixed assets
      During the year, the Bank has revised the estimated useful life of certain fixed assets viz; cheque book encoder, currency
      counting machine, cheque encoder, fax machine/telex, fake note detector, UPS, VSAT and scrollers from 10 years to
      5 years. As a result of the aforesaid revision, the net depreciation charge for the year is higher by `22.17 crores with a
      corresponding decrease in the net block of the fixed assets.
5     Significant accounting policies
5.1   Investments
      Classification
      In accordance with the RBI guidelines, investments are classified at the date of purchase as:
      l     Held for Trading (‘HFT’);
      l     Available for Sale (‘AFS’); and
      l     Held to Maturity (‘HTM’).
      Investments that are held principally for sale within a short period are classified as HFT securities. As per the RBI
      guidelines, HFT securities, which remain unsold for a period of 90 days are reclassified as AFS securities as on that date.
      Investments that the Bank intends to hold till maturity are classified under the HTM category.
      All other investments are classified as AFS securities.
      However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
      Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
      Others.
      Investments made outside India are classified under three categories – Government Securities, Subsidiaries and/or Joint
      Ventures abroad and Others.




                                                                                                                            43
     Transfer of security between categories
     Transfer of security between categories of investments is accounted as per the RBI guidelines.
     Acquisition cost
     Costs including brokerage, commission pertaining to investments, paid at the time of acquisition, are charged to the
     Profit and Loss Account.
     Broken period interest is charged to the Profit and Loss Account.
     Cost of investments is computed based on the weighted average cost method.
     Valuation
     Investments classified under the HTM category are carried at acquisition cost unless it is more than the face value, in
     which case the premium is amortised over the period remaining to maturity. In terms of RBI guidelines, discount on
     securities held under HTM category is not accrued and such securities are held at the acquisition cost till maturity.
     Investments classified under the AFS and HFT categories are marked to market. The market/fair value of quoted
     investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the scrip as available from the trades/
     quotes on the stock exchanges or prices declared by Primary Dealers Association of India (‘PDAI’) jointly with Fixed
     Income Money Market and Derivatives Association of India (‘FIMMDA’), periodically. Net depreciation, if any, within
     each category of each investment classification is recognised in the Profit and Loss Account. The net appreciation if any,
     under each category of each investment classification is ignored. The book value of individual securities is not changed
     consequent to the periodic valuation of investments.
     Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate of Deposits being discounted instruments, are
     valued at carrying cost.
     Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.
     Market value of investments where current quotations are not available, is determined as per the norms prescribed by
     the RBI as under:
     l     in case of unquoted bonds, debentures and preference shares where interest/dividend is received regularly (i.e. not
           overdue beyond 90 days), the market price is derived based on the YTM for Government Securities as published by
           FIMMDA/PDAI and suitably marked up for credit risk applicable to the credit rating of the instrument. The matrix
           for credit risk mark-up for each categories and credit ratings along with residual maturity issued by FIMMDA is
           adopted for this purpose;
     l     in case of bonds and debentures (including Pass Through Certificates) where interest is not received regularly (i.e.
           overdue beyond 90 days), the valuation is in accordance with prudential norms for provisioning as prescribed by
           RBI;
     l     equity shares, for which current quotations are not available or where the shares are not quoted on the stock
           exchanges, are valued at break-up value (without considering revaluation reserves, if any) which is ascertained
           from the company’s latest Balance Sheet. In case the latest Balance Sheet is not available, the shares are valued at
           Re 1 per company;
     l     units of Venture Capital Funds (VCF) held under AFS category where current quotations are not available are
           marked to market based on the Net Asset Value (NAV) shown by VCF as per the latest audited financials of the
           fund. In case the audited financials are not available for a period beyond 18 months, the investments are valued
           at Re 1 per VCF. Investment in unquoted VCF after 23rd August, 2006 are categorised under HTM category for the
           initial period of three years and valued at cost as per RBI guidelines;
     l     investments in Credit Linked Notes (‘CLNs’), are valued based on current quotations where the same are available.
           In the absence of quotes, the same are valued based on internal valuation methodology using appropriate mark-
           up and other estimates such as price of the underlying Foreign Currency Convertible Bond (FCCB), rating category
           of the CLN etc. and



44
      l     security receipts are valued as per the Net Asset Value (NAV) obtained from the issuing Reconstruction Company
            /Securitisation Company.

      Investments in subsidiaries/joint ventures are categorised as HTM and assessed for impairment to determine permanent
      diminution, if any, in accordance with the RBI guidelines.

      Realised gains on investments under the HTM category are recognised in the Profit and Loss Account and subsequently
      appropriated to Capital Reserve account in accordance with the RBI guidelines. Losses are recognised in the Profit and
      Loss Account.

      All investments are accounted for on settlement date except investments in equity shares which are accounted for on
      trade date as the corporate actions are effected in equity on the trade date.

      Repurchase and reverse repurchase transactions

      Repurchase and reverse repurchase transactions [excluding those conducted under the Liquid Adjustment Facility (LAF)
      with RBI] are accounted as collateralised borrowing and lending respectively. Such transactions done under LAF are
      accounted as outright sale and outright purchase respectively. However, depreciation in their value, if any, compared to
      their original cost, is recognised in the Profit and Loss Account.

5.2   Advances

      Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
      net of specific provisions made towards NPAs and floating provisions. Further, NPAs are classified into sub-standard,
      doubtful and loss assets based on the criteria stipulated by the RBI. Provisions for NPAs are made for sub-standard
      and doubtful assets at rates as prescribed by the RBI with the exception for agriculture advances and schematic retail
      advances. In respect of schematic retail advances, provisions are made in terms of a bucket-wise policy upon reaching
      specified stages of delinquency (90 days or more of delinquency) under each type of loan, which satisfies the RBI
      prudential norms on provisioning. Provisions in respect of agriculture advances classified into sub-standard and doubtful
      assets are made at rates which are higher than those prescribed by the RBI.

      Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines. NPAs are
      identified by periodic appraisals of the loan portfolio by the Management.

      Amounts recovered against debts written off are recognised in the profit and loss account.

      For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which requires
      the diminution in the fair value of the assets to be provided at the time of restructuring.

      A general provision @ 0.25% in case of direct advances to agricultural and SME sectors, 1% in respect of advances
      classified as commercial real estate, 2% in respect of housing loans at teaser rates and certain class of restructured assets
      and 0.40% for all other advances is made as prescribed by the RBI.

5.3   Country risk

      In addition to the provisions required to be held according to the asset classification status, provisions are held for
      individual country exposure (other than for home country). The countries are categorised into seven risk categories
      namely insignificant, low, moderate, high, very high, restricted and off-credit and provision is made on exposures
      exceeding 180 days on a graded scale ranging from 0.25% to 100%. For exposures with contractual maturity of less
      than 180 days, 25% of the normal provision requirement is held. If the country exposure (net) of the Bank in respect of
      each country does not exceed 1% of the total funded assets, no provision is maintained on such country exposure.

5.4   Securtisation

      The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose Vehicle
      (‘SPV’). In most cases, post securtisation, the Bank continues to service the loans transferred to the assignee/SPV. The
      Bank also provides credit enhancement in the form of cash collaterals and/or by subordination of cash flows to Senior
      Pass Through Certificate (‘PTC’) holders. In respect of credit enhancements provided or recourse obligations (projected
      delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale



                                                                                                                              45
      in accordance with AS 29, Provisions, Contingent Liabilities and Contingent Assets as notified under the Companies
      (Accounting Standards) Rules, 2006.
      In accordance with RBI guidelines of 2nd February 2006, on ‘Guidelines on Securitisation of Standard Assets’, gain
      on securtisation transactions is recognised over the period of the underlying securities issued by the SPV. Loss on
      securtisation is immediately debited to the Profit and Loss Account.
5.5   Foreign currency transactions
      In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
      prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the Balance
      Sheet date at rates notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses resulting from
      year end revaluations are recognised in the Profit and Loss Account.
      Financial statements of foreign branches classified as non-integral foreign operations are translated as follows:
      l     Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
            rates notified by FEDAI at the year end.
      l     Income and expenses are translated at the rates prevailing on the date of the transactions.
      l     All resulting exchange differences are accumulated in a separate ‘Foreign Currency Translation Reserve’ till the
            disposal of the net investments.
      Outstanding forward exchange contracts (excluding currency swaps undertaken to hedge foreign currency assets/
      liabilities and funding swaps which are not revalued) and spot exchange contracts are revalued at year end exchange
      rates notified by FEDAI for specified maturities and at interpolated rates for contracts of interim maturities. The resulting
      gains or losses on revaluation are included in the Profit and Loss Account in accordance with RBI/FEDAI guidelines. The
      forward exchange contracts of longer maturities where exchange rates are not notified by FEDAI are revalued at the
      forward exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised
      in the Profit and Loss Account.
      Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding swaps is
      recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap period.
      Currency futures contracts are marked to market using daily settlement price on a trading day, which is the closing price
      of the respective futures contracts on that day. While the daily settlement price is computed based on the last half an
      hour weighted average price of such contract, the final settlement price is taken as the RBI reference rate on the last
      trading day of the futures contract or as may be specified by the relevant authority from time to time. All open positions
      are marked to market based on the settlement price and the resultant marked to market profit/loss is daily settled with
      the exchange.
      Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price of each
      individual option provided by the exchange.
      Contingent liabilities on account of foreign exchange contracts/options, guarantees, acceptances, endorsements and
      other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified by FEDAI.
5.6   Derivative transactions
      Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent liabilities.
      The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative contracts are
      revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Profit and Loss
      Account and correspondingly in other assets or other liabilities respectively. For hedge transactions, the Bank identifies
      the hedged item (asset or liability) at the inception of transaction itself. The effectiveness is ascertained at the time
      of inception of the hedge and periodically thereafter. Hedge swaps are accounted for on accrual basis except in case
      of swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the
      financial statements. In such cases the swaps are marked to market with the resulting gain or loss recorded as an
      adjustment to the market value of designated asset or liability. The premium on option contracts is accounted for as



46
      per Foreign Exchange Dealers’ Association of India guidelines. Pursuant to the RBI guidelines any receivables under
      derivative contracts comprising of crystallised receivables as well as positive Mark to Market (MTM) in respect of future
      receivables which remain overdue for more than 90 days are reversed through the profit and loss account and are held
      in separate Suspense account.
5.7   Revenue recognition
      Interest income is recognised on an accrual basis except interest income on non-performing assets, which is recognised
      on receipt in accordance with AS–9, Revenue Recognition as notified under the Companies (Accounting Standards)
      Rules, 2006 and the RBI guidelines.
      Fees and commission income is recognised when due, except for guarantee commission which is recognised pro-rata
      over the period of the guarantee.
      Dividend is accounted on an accrual basis when the right to receive the dividend is established.
      Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.
      Gain or loss arising on sale of NPAs is accounted as per the guidelines prescribed by the RBI, which require provisions
      to be made for any deficit (where sale price is lower than the net book value), while surplus (where sale price is higher
      than the net book value) is ignored.
      Arrangership/syndication fee is accounted for on completion of the agreed service and when right to receive is
      established.
5.8   Fixed assets and depreciation
      Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes freight,
      duties, taxes and incidental expenses related to the acquisition and installation of the asset.
      Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes advances
      paid to acquire fixed assets.
      Depreciation is provided on the straight-line method from the date of addition. The rates of depreciation prescribed in
      Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If the Management’s estimate of the
      useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is
      shorter, then depreciation is provided at a higher rate based on the Management’s estimate of the useful life/remaining
      useful life. Pursuant to this policy, depreciation has been provided using the following estimated useful life:

      Asset                                                                                                 Estimated useful life
      Owned premises                                                                                                    61 years
      Assets given on operating lease                                                                                   20 years
      Computer hardware including printers                                                                               3 years
      Application software                                                                                                 5 years
      Vehicles                                                                                                             4 years
      EPABX, telephone instruments                                                                                         8 years
      CCTV and video conferencing equipment                                                                                3 years
      Mobile phone                                                                                                         2 years
      Locker cabinets/cash safe/strong room door                                                                          16 years
      Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment                                             5 years
      UPS, VSAT, fax machines                                                                                              5 years
      Cheque book/cheque encoder, currency counting machine, fake note detector                                            5 years
      Assets at staff residence                                                                                            3 years
      All other fixed assets                                                                                              10 years
      All fixed assets individually costing less than `5,000 are fully depreciated in the year of installation.
      Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till the date
      of sale.



                                                                                                                               47
      The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
      impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an
      asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value
      in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted
      average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its
      remaining useful life.
      Profit on sale of premises is appropriated to Capital Reserve Account in accordance with RBI instructions.
5.9   Lease transactions
      Assets given on operating lease are capitalised at cost. Rentals received by the Bank are recognised in the Profit and Loss
      Account on accrual basis.
      Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are
      classified as operating lease. Lease payments for assets taken on operating lease are recognised as an expense in the
      Profit and Loss Account on a straight-line basis over the lease term.
5.10 Retirement and other employee benefits
      Provident Fund
      Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged to
      the Profit and Loss Account of the year when the contributions to the fund are due. Further, an actuarial valuation is
      conducted by an independent actuary to determine the deficiency, if any, in the interest payable on the contributions as
      compared to the interest liability as per the statutory rate.
      Gratuity
      The Bank contributes towards gratuity fund (defined benefit retirement plan) administered by the Life Insurance
      Corporation of India (‘LIC’), Metlife Insurance Company Limited (‘Metlife’), HDFC Standard Life Insurance Company
      Limited (‘HDFC Life’), ICICI Prudential Life Insurance Company Limited (‘ICICI Pru’) and Bajaj Life Insurance Company
      Limited (‘BLIC’) for eligible employees. Under this scheme, the settlement obligations remain with the Bank, although
      LIC/Metlife/HDFC Life/ICICI Pru/BLIC administer the scheme and determine the contribution premium required to
      be paid by the Bank. The plan provides a lump sum payment to vested employees at retirement or termination of
      employment based on the respective employee’s salary and the years of employment with the Bank. Liability with regard
      to gratuity fund is accrued based on actuarial valuation conducted by an independent actuary using the Projected Unit
      Credit Method as at 31 March each year.
      Leave Encashment
      Short term compensated absences are provided for based on estimates. The Bank provides leave encashment benefit
      (long term), which is a defined benefit scheme based on actuarial valuation conducted by an independent actuary. The
      actuarial valuation is carried out as per the Projected Unit Credit Method as at 31 March each year.
      Superannuation
      Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either under
      a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan, the Bank
      contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC, which undertakes to
      pay the lump sum and annuity benefit payments pursuant to the scheme. Superannuation contributions are recognised
      in the Profit and Loss Account in the period in which they accrue.
      Actuarial gains/losses are immediately taken to the Profit and Loss Account and are not deferred.
5.11 Debit/Credit card reward points
      The Bank estimates the probable redemption of debit and credit card reward points using an actuarial method at the
      Balance Sheet date by employing an independent actuary. Provision for the said reward points is then made based on
      the actuarial valuation report as furnished by the said independent actuary.



48
5.12 Taxation
     Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined
     in accordance with the Income tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences
     between taxable income and accounting income for the year and reversal of timing differences of earlier years.
     Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet
     date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax
     assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income
     levied by same governing taxation laws.
     Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable
     income will be available against which such deferred tax assets can be realised. The impact of changes in the deferred
     tax assets and liabilities is recognised in the Profit and Loss Account.
     Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s judgement
     as to whether realisation is considered as reasonably certain. Deferred tax assets are recognised on carry forward of
     unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax asset can be realised
     against future profits.
5.13 Share issue expenses
     Share issue expenses are adjusted from Share Premium Account in terms of Section 78 of the Companies Act, 1956.
5.14 Earnings per share
     The Bank reports basic and diluted earnings per share in accordance with AS 20, Earnings per Share, as notified by the
     Companies (Accounting Standards) Rules, 2006. Basic earnings per share is computed by dividing the net profit after tax
     by the weighted average number of equity shares outstanding for the year.
     Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity
     shares were exercised or converted during the year. Diluted earnings per share is computed using the weighted average
     number of equity shares and dilutive potential equity shares outstanding at the year end.
5.15 Employee stock option scheme
     The 2001 Employee Stock Option Scheme (‘the Scheme’) provides for grant of stock options on equity shares of the
     Bank to employees and Directors of the Bank and its subsidiaries. The Scheme is in accordance with the Securities and
     Exchange Board of India (SEBI) (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
     1999. The Bank follows the intrinsic value method to account for its stock based employee compensation plans as per
     the Guidance Note on ‘Accounting for Employee Share-based Payments’ issued by the ICAI. Options are granted at an
     exercise price, which is equal to/less than the fair market price of the underlying equity shares. The excess of such fair
     market price over the exercise price of the options as at the grant date is recognised as a deferred compensation cost
     and amortised on a straight-line basis over the vesting period of such options.
     The fair market price is the latest available closing price, prior to the date of grant, on the stock exchange on which the
     shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock exchange where
     there is highest trading volume on the said date is considered.
5.16 Provisions, contingent liabilities and contingent assets
     A provision is recognised when the Bank has a present obligation as a result of past event where it is probable that
     an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
     Provisions are not discounted to its present value and are determined based on best estimate required to settle the
     obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current
     best estimates.
     A disclosure of contingent liability is made when there is:
     l     a possible obligation arising from a past event, the existence of which will be confirmed by occurrence or non
           occurrence of one or more uncertain future events not within the control of the Bank; or



                                                                                                                               49
     l     a present obligation arising from a past event which is not recognised as it is not probable that an outflow of
           resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be
           made.
     When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is
     remote, no provision or disclosure is made.
     Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually
     and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in
     the period in which the change occurs.




50
18 Notes forming part of the financial statements for the year ended 31 March,
   2012
        (Currency: In Indian Rupees)
1        a)    On 17 November, 2010, the Board of Directors of the Bank had approved the acquisition of certain financial
               services businesses undertaken by Enam Securities Private Limited (ESPL) directly and through its wholly owned
               subsidiaries, by Axis Securities and Sales Limited (ASSL), a wholly owned subsidiary of the Bank by way of a
               demerger. However, pursuant to conditions prescribed by the Reserve Bank of India, certain modifications have
               been carried out to the demerger structure in terms of a revised Scheme of Arrangement under Sections 391-
               394 and other relevant provisions of the Companies Act, 1956. Accordingly, the acquisition will now comprise
               of (a) a demerger of the financial services businesses from ESPL to the Bank, in consideration of which the Bank
               will issue shares to the shareholders of ESPL, and (b) immediately upon completion of the demerger under the
               Scheme, a simultaneous sale of the financial services businesses will be undertaken from the Bank to ASSL for a
               cash consideration, with both the aforesaid steps occurring simultaneously. The Reserve Bank of India has on 30
               March, 2012, conveyed its no objection to the Scheme. Further, on 27 April, 2012, the Board of Directors of the
               Bank have approved the reassessment of the valuation of the ESPL business at `1,396 crores and consequently,
               in consideration for the demerger of the financial services business of ESPL, the Bank will issue shares in the ratio
               of 5 equity shares of the Bank (aggregating 12,090,000 equity shares) of the face value of `10 each for every 1
               equity share (aggregating 2,418,000 equity shares) of `10 each held by the shareholders of ESPL. The sale of the
               financial services businesses will be simultaneously undertaken from the Bank to ASSL for a cash consideration
               of `274 crores only. The appointed date under the Scheme is 1 April, 2010, and the parties shall proceed with
               filing the Revised Scheme and other necessary documents with the relevant High Courts and other regulatory
               authorities for their approvals.
         b)    The Board of Directors of the Bank have, on 27 April, 2012, approved a proposal to induct Schroder Singapore
               Holdings Private Limited, a wholly owned subsidiary of Schroders plc, as a 25% shareholder in Axis Asset
               Management Company Ltd., a wholly owned subsidiary of the Bank. The transaction is subject to regulatory
               approvals.
2        Statutory disclosures as per RBI
2.1.1    ‘Provisions and contingencies’ recognised in the Profit and Loss Account include:
                                                                                                                       (` in crores)
          For the year ended                                                               31 March, 2012         31 March, 2011
          Provision for income tax
          - Current tax for the year                                                              2,256.23               1,953.03
          - Deferred tax for the year                                                              (210.60)               (205.52)
          Provision for fringe benefit tax                                                                 -                (0.34)
                                                                                                  2,045.63                1,747.17
          Provision for wealth tax                                                                     0.36                   0.46
          Provision for interest tax                                                                       -                  0.29
          Provision for non-performing assets
          (including bad debts written off and write backs)                                         860.43                 955.12
          Provision for restructured assets                                                           88.86                 15.06
          Provision towards standard assets                                                          150.30                166.16
          Provision for depreciation in value of investments                                          58.10                 99.27
          Provision for country risk                                                                   4.81                   2.45
          Provision for other contingencies                                                         (19.83)                  41.22
          Total                                                                                    3,188.66              3,027.20




                                                                                                                               51
2.1.2 The capital adequacy ratio of the Bank, calculated as per the RBI guidelines (Basel II requirement being higher) is set out
      below:
                                                                                                                   (` in crores)
                                                                                          31 March, 2012        31 March, 2011
        Capital adequacy
        Tier I                                                                                  21,886.11             18,503.49
        Tier II                                                                                  9,758.84              6,366.86
        Total capital                                                                           31,644.95             24,870.35
        Total risk weighted assets and contingents                                             231,711.39            196,562.61
        Capital ratios
        Tier I                                                                                     9.45%                 9.41%
        Tier II                                                                                    4.21%                 3.24%
        CRAR                                                                                     13.66%                 12.65%
        Amount raised by issue of Innovative Perpetual Debt Instruments (IPDI)                          -                     -
        Amount raised by issue of Upper Tier II instruments                                             -                     -
        Amount of Subordinated Debt raised as Tier II capital (details given below)         `3,425 crores                     -
        During the year ended 31 March, 2012, the Bank raised subordinated debt of `3,425 crores, the details of which are
        set out below:

        Date of allotment             Period                        Coupon                                             Amount
        1 December, 2011              120 months                    9.73%                                      `1,500.00 crores
        20 March, 2012                120 months                    9.30%                                      `1,925.00 crores
        The Bank has not raised any subordinated debt during the year ended 31 March, 2011.
        During the year ended 31 March, 2012, the Bank redeemed subordinated debt of `5 crores, the details of which are
        set out below:

        Date of maturity             Period                         Coupon                                             Amount
        26 April, 2011               93 months                      6.70%                                           `5.00 crores
        During the year ended 31 March, 2011, the Bank redeemed subordinated debt of `155 crores, the details of which are
        set out below:

        Date of maturity             Period                         Coupon                                             Amount
        4 June, 2010                 72 months                      5.75%                                        `150.00 crores
        20 June, 2010                93 months                      9.05%                                           `5.00 crores
2.1.3   The Bank has not raised any hybrid capital during the years ended 31 March, 2012 and 31 March, 2011.
2.1.4   The key business ratios and other information is set out below:

        As at                                                                             31 March, 2012        31 March, 2011
                                                                                                       %                     %
        Interest income as a percentage to working funds #                                           8.71                  7.49
        Non-interest income as a percentage to working funds #                                       2.15                  2.29
        Operating profit as a percentage to working funds #                                          2.94                  3.17
        Return on assets (based on working funds) #                                                  1.68                  1.68
        Business (deposits less inter bank deposits plus advances) per employee**           `12.76 crores         `13.66 crores
        Profit per employee**                                                                 `0.14 crore           `0.14 crore
        Net non performing assets as a percentage of net customer assets *                           0.25                  0.26




 52
        #     Working funds represent average of total assets as reported to RBI in Form X under Section 27 of the Banking
              Regulation Act, 1949 during the year
        *     Net Customer assets include advances and credit substitutes
        **    Productivity ratios are based on average employee numbers for the year
2.1.5   The provisioning coverage ratio of the Bank computed in terms of the RBI guidelines as on 31 March, 2012 was 80.91%
        (previous year 80.90%).
2.1.6   Asset Quality
        i)    Net non-performing assets to net advances is set out below:

                                                                                        31 March, 2012      31 March, 2011
                                                                                                    %                   %
              Net non-performing assets as a percentage of net advances                           0.27                 0.29
        ii)   Movement in gross non-performing assets is set out below:
                                                                                                                (` in crores)
                                                                                       31 March, 2012
                                                                   Advances     Investments        Others*            Total
              Gross NPAs as at the beginning of the year            1,586.99             12.43              -      1,599.42
              Transfer from advances to others                         (5.29)                 -          5.29                -
              Additions (fresh NPAs) during the year                1,772.81             67.81           1.32      1,841.94
              Sub-total (A)                                         3,354.51             80.24           6.61     3,441.36
              Less:-
              (i)   Upgradations                                      744.99                  -             -        744.99
              (ii) Recoveries (excluding recoveries made from
                   upgraded accounts)                                 223.41              0.78              -        224.19
              (iii) Write-offs                                        665.88                  -             -        665.88
              Sub-total (B)                                         1,634.28              0.78              -     1,635.06
              Gross NPAs as at the end of the year (A-B)            1,720.23             79.46           6.61     1,806.30
              *represents amount outstanding under application money classified as non-performing asset.
                                                                                                                (` in crores)
                                                                                       31 March, 2011
                                                                   Advances     Investments         Others            Total
              Gross NPAs as at the beginning of the year            1,295.42             22.58              -      1,318.00
              Additions (fresh NPAs) during the year                1,448.31                  -             -     1,448.31
              Sub-total (A)                                         2,743.73             22.58              -     2,766.31
              Less:-
              (i)   Upgradations                                      228.59                  -             -        228.59
              (ii) Recoveries (excluding recoveries made from
                   upgraded accounts)                                 260.23               9.90             -        270.13
              (iii) Write-offs                                        667.92               0.25             -        668.17
              Sub-total (B)                                         1,156.74              10.15             -     1,166.89
              Gross NPAs as at the end of the year (A-B)            1,586.99             12.43              -     1,599.42




                                                                                                                        53
     iii)   Movement in net non-performing assets is set out below:
                                                                                                              (` in crores)
                                                                                  31 March, 2012
                                                                Advances       Investments         Others           Total
            Opening balance at the beginning of the year           410.35                 -               -        410.35
            Additions during the year                            1,000.15            15.94             1.12      1,017.21
            Reductions during the year                            (947.51)                -               -       (947.51)
            Interest Capitalisation – Restructured NPA
            Accounts                                                  (7.41)              -               -         (7.41)
            Closing balance at the end of the year                 455.58            15.94             1.12       472.64
                                                                                                              (` in crores)
                                                                                  31 March, 2011
                                                                Advances       Investments         Others           Total
            Opening balance at the beginning of the year           412.60             6.40                -        419.00
            Additions during the year                              453.05                 -               -        453.05
            Reductions during the year                            (452.97)           (6.40)               -      (459.37)
            Interest Capitalisation – Restructured NPA
            Accounts                                                (2.33)                -               -         (2.33)
            Closing balance at the end of the year                 410.35                 -               -        410.35

     iv)    Movement in provisions for non-performing assets is set out below:
                                                                                                              (` in crores)
                                                                                  31 March, 2012
                                                                Advances       Investments         Others           Total
            Opening balance at the beginning of the year          1,174.31           12.43                -      1,186.74
            Provisions made during the year                        768.75            51.87             5.49        826.11
            Transfer to restructuring provision                       (1.38)              -               -         (1.38)
            Write-offs/(write back) of excess provisions          (686.77)           (0.78)               -      (687.55)
            Closing balance at the end of the year               1,254.91            63.52             5.49     1,323.92

                                                                                                              (` in crores)
                                                                                  31 March, 2011
                                                                Advances       Investments         Others           Total
            Opening balance at the beginning of the year           882.82            16.18                -        899.00
            Provisions made during the year                        984.25                 -               -       984.25
            Transfer from restructuring provision                     11.01               -               -          11.01
            Write-offs/(write back) of excess provision           (703.77)           (3.75)               -       (707.52)
            Closing balance at the end of the year               1,174.31            12.43                -      1,186.74

     v)     Total exposure to top four non-performing assets is given below:
                                                                                                              (` in crores)
                                                                                    31 March, 2012        31 March, 2011
            Total exposure to top four NPA accounts                                           582.10               291.54




54
        vi)    Non-performing assets as percentage of total assets in that sector is set out below:

               Sr. No. Sector                                                          31 March, 2012        31 March, 2011
                                                                                                   %                     %
               1.      Agriculture and allied activities                                              2.33              2.56
               2.      Industry (Micro & Small, Medium and Large)                                     0.75              1.15
               3.      Services*                                                                      0.96              0.21
               4.      Personal loans                                                                 0.81              1.38

              * includes 0.01% (previous year Nil) NPAs in respect of commercial real estate and 0.16% (previous year 0.11%)
              in respect of trade segment
2.1.7   Movement in floating provision is set out below:
                                                                                                                (` in crores)
        For the year ended                                                              31 March, 2012       31 March, 2011
        Opening balance at the beginning of the year                                              3.25                 3.25
        Provisions made during the year                                                              -                    -
        Draw down made during the year                                                               -                    -
        Closing balance at the end of the year                                                    3.25                 3.25
        The Bank has not made any draw down out of the floating provision during the current and the previous year.
2.1.8   Provision on Standard Assets
                                                                                                                (` in crores)
                                                                                        31 March, 2012       31 March, 2011
        Provision towards Standard Assets [includes `21.61 crores, (previous year
        `16.69 crores) of standard provision on derivative exposures]                            779.96               629.66
2.1.9   Amount of provisions made for income-tax during the year:
                                                                                                                (` in crores)
                                                                                        31 March, 2012       31 March, 2011
        Provision for Income Tax
        a) Current tax for the year                                                            2,256.23            1,953.03
        b) Deferred tax for the year                                                           (210.60)            (205.52)
        c) Provision for fringe benefit tax                                                           -               (0.34)
                                                                                               2,045.63             1,747.17
2.1.10 Details of Investments are set out below:
        i)    Value of Investments:
                                                                                                                (` in crores)
                                                                                        31 March, 2012       31 March, 2011
        1)    Gross value of Investments
                   a) In India                                                                92,875.81           71,641.51
                   b) Outside India                                                              707.35              631.99
        2)    (i) Provision for Depreciation
                   a) In India                                                                 (348.00)            (210.62)
                   b) Outside India                                                               20.45             (58.83)
              (ii) Provision for Non-Performing Investments
                   a) In India                                                                   (63.01)              (12.43)
                   b) Outside India                                                               (0.51)                    -




                                                                                                                        55
                                                                                        31 March, 2012   31 March, 2011
       3)    Net value of Investments
                 a) In India                                                                92,464.80         71,418.46
                 b) Outside India                                                              727.29            573.16
       ii)   Movement of provisions held towards depreciation on investments:
                                                                                                            (` in crores)
                                                                                        31 March, 2012   31 March, 2011
       Opening balance                                                                         269.45            170.18
       Add: Provisions made during the year                                                    105.97           124.68
       Less: Write-offs/write back of excess provisions during the year                          47.87            25.41
       Closing balance                                                                          327.55          269.45

2.1.11 A summary of lending to sensitive sectors is set out below:
                                                                                                            (` in crores)
       As at                                                                            31 March, 2012   31 March, 2011
       A. Exposure to Real Estate Sector
       1)    Direct Exposure
             (i)   Residential mortgages                                                     30,774.98       20,646.94
                   - of which housing loans eligible for inclusion in priority sector
                   advances                                                                  10,248.76        6,978.34
             (ii) Commercial real estate                                                     11,292.31         9,029.16
             (iii) Investments in Mortgage Backed Securities (MBS) and other
                   securtised exposures -
                   a.   Residential                                                                  -                  -
                   b.   Commercial real estate                                                       -                  -
       2)    Indirect Exposure
             Fund based and non-fund based exposures on National Housing
             Bank (NHB) and Housing Finance Companies (HFCs)                                 10,663.10         9,725.22
       Total Exposure to Real Estate Sector                                                  52,730.39       39,401.32
       B.    Exposure to Capital Market
       1.    Direct investments in equity shares, convertible bonds, convertible
             debentures and units of equity-oriented mutual funds the corpus of
             which is not exclusively invested in corporate debt                              1,326.85           999.71
       2.    Advances against shares/bonds/debentures or other securities or on
             clean basis to individuals for investment in shares (including IPOs/
             ESOPs), convertible bonds, convertible debentures, and units of
             equity-oriented mutual funds                                                         2.48             5.67
       3.    Advances for any other purposes where shares or convertible bonds
             or convertible debentures or units of equity-oriented mutual funds
             are taken as primary security                                                     448.09            256.75
       4.    Advances for any other purposes to the extent secured by the
             collateral security of shares or convertible bonds or convertible
             debentures or units of equity-oriented mutual funds i.e. where
             primary security other than shares/convertible bonds/convertible
             debentures/units of equity-oriented mutual funds does not fully
             cover the advances                                                                   1.55              7.55



 56
       As at                                                                         31 March, 2012          31 March, 2011
       5.    Secured and unsecured advances to stockbrokers and guarantees
             issued on behalf of stockbrokers and marketmakers                              2,521.87                1,966.19
       6.    Loans sanctioned to corporates against the security of shares/
             bonds/debentures or other securities or on clean basis for meeting
             promoter’s contribution to the equity of new companies in
             anticipation of raising resources                                                303.11                  47.44
       7.    Bridge loans to companies against expected equity flows/issues                       2.00                 0.31
       8.    Underwriting commitments taken up in respect of primary issue of
             shares or convertible bonds or convertible debentures or units of
             equity-oriented mutual funds                                                            -                       -
       9.    Financing to stock brokers for margin trading                                           -                       -
       10. All exposures to Venture Capital Funds (both registered and
           unregistered)                                                                      140.90                 258.13
       Total Exposure to Capital Market (Total of 1 to 10)                                  4,746.85                3,541.75
2.1.12 Details of loan assets subjected to restructuring during the years ended 31 March, 2012 and 31 March, 2011 are given
       below:
                                                                                                               (` in crores)
             Particulars                                                                     31 March, 2012
                                                                                         CDR     SME Debt            Others
                                                                                    Mechanism Restructuring
       i)    Standard advances       No. of borrowers                                       16                 4         82
             restructured**          Amount outstanding-Restructured facility   #
                                                                                        881.06            64.79      354.43
                                     Amount outstanding-Other facilities                 15.04                  -      9.75
                                     Sacrifice (diminution in the fair value)           146.24               1.57      2.36
       ii)   Sub-Standard            No. of borrowers                                         -                 -            -
             advances restructured   Amount outstanding-Restructured facility                 -                 -            -
                                     Amount outstanding-Other facilities                      -                 -            -
                                     Sacrifice (diminution in the fair value)                 -                 -            -
       iii) Doubtful advances        No. of borrowers                                         -                 -            -
             restructured            Amount outstanding-Restructured facility                 -                 -            -
                                     Amount outstanding-Other facilities                      -                 -            -
                                     Sacrifice (diminution in the fair value)                 -                 -            -
             Total                   No. of borrowers                                       16                 4         82
                                     Amount outstanding-Restructured facility           881.06            64.79      354.43
                                     Amount outstanding-Other facilities                 15.04                  -      9.75
                                     Sacrifice (diminution in the fair value)           146.24               1.57      2.36
       ** Asset classification as on the date of reference to CDR/date of application for Non-CDR cases
       # Amount subjected to restructuring determined as on the date of approval of restructuring proposal




                                                                                                                        57
                                                                                                                    (` in crores)
                Particulars                                                                        31 March, 2011
                                                                                            CDR     SME Debt              Others
                                                                                       Mechanism Restructuring
       i)       Standard advances       No. of borrowers                                           2                4           117
                restructured**          Amount outstanding-Restructured facility   #
                                                                                              96.55             47.22     259.96
                                        Amount outstanding-Other facilities                    2.89              5.47         15.32
                                        Sacrifice (diminution in the fair value)              14.18              3.97          2.58
       ii)      Sub-Standard            No. of borrowers                                           -                -             -
                advances restructured   Amount outstanding-Restructured facility                   -                -             -
                                        Amount outstanding-Other facilities                        -                -             -
                                        Sacrifice (diminution in the fair value)                   -                -             -
       iii) Doubtful advances           No. of borrowers                                           -                -             -
                restructured            Amount outstanding-Restructured facility                   -                -             -
                                        Amount outstanding-Other facilities                        -                -             -
                                        Sacrifice (diminution in the fair value)                   -                -             -
                Total                   No. of borrowers                                           2                4          117
                                        Amount outstanding-Restructured facility              96.55             47.22     259.96
                                        Amount outstanding-Other facilities                    2.89              5.47         15.32
                                        Sacrifice (diminution in the fair value)              14.18              3.97          2.58
       ** Asset classification as on the date of reference to CDR/date of application for Non-CDR cases
       # Amount subjected to restructuring determined as on the date of approval of restructuring proposal
2.1.13 There are no advances as on 31 March, 2012 (previous year: Nil) for which intangible securities have been taken as
       collateral by the Bank.
2.1.14 Details of Non-SLR investment portfolio are set out below:
       i)       Issuer composition as at 31 March, 2012 of non-SLR investments*:
                                                                                                                    (` in crores)
        No.                    Issuer               Total          Extent of        Extent of      Extent of       Extent of
                                                   Amount            private         “below        “unrated”       “unlisted”
                                                                   placement       investment      securities      securities
                                                                                     grade”
                                                                                    securities
          (1)                    (2)                  (3)               (4)            (5)             (6)              (7)
       i.         Public Sector Units                 3,220.12          2,202.86         167.00              -              10.00
       ii.        Financial Institutions              9,681.20          7,824.38               -             -           5,100.53
       iii.       Banks                               5,160.69          2,531.39               -             -           4,427.19
       iv.        Private Corporates                 16,270.98         13,134.49         486.34         175.59             743.69
       v.         Subsidiaries/Joint Ventures           349.55            349.55               -             -             349.55
       vi.        Others                                412.65            258.17               -             -             290.71
       vii.       Provision held towards
                  depreciation on investments          (255.79)
       viii       Provision held towards non
                  performing investments                (63.52)
                  Total                              34,775.88        26,300.84         653.34          175.59          10,921.67
       Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.



 58
       Issuer composition as at 31 March, 2011 of non-SLR investments*:
                                                                                                                           (` in crores)
        No.                     Issuer              Total         Extent of          Extent of        Extent of          Extent of
                                                   Amount           private           “below          “unrated”          “unlisted”
                                                                  placement         investment        securities         securities
                                                                                      grade”
                                                                                     securities
            (1)                   (2)                 (3)              (4)              (5)              (6)                 (7)
       i.           Public Sector Units               2,107.65         1,081.31                1.00                -               10.00
       ii.          Financial Institutions             7,158.12        4,946.68                   -                -          4,114.56
       iii.         Banks                             4,087.16         1,687.67               10.00                -          3,102.52
       iv.          Private Corporates               13,552.17        10,986.87              535.10        229.85            1,226.48
       v.           Subsidiaries/Joint Ventures         259.55            259.55                  -                -            259.55
       vi.          Others                              901.31            847.18                  -                -            407.38
       vii.         Provision held towards
                    depreciation on investments        (216.86)
       viii         Provision held towards non
                    performing investments              (12.43)
                    Total                            27,836.67        19,809.26              546.10        229.85            9,120.49
       Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.
       *Excludes investments in non-SLR Government Securities amounting to `156.68 crores (previous year `158.03 crores)
       ii)        Non-performing non-SLR investments is set out below:
                                                                                                                           (` in crores)
                                                                                             31 March, 2012            31 March, 2011
        Opening balance                                                                               12.43                     22.58
        Additions during the year                                                                     67.81                            -
        Reductions during the year                                                                    (0.78)                   (10.15)
        Closing balance                                                                               79.46                        12.43
        Total provisions held                                                                         63.52                        12.43
2.1.15 Details of securities sold/purchased (in face value terms) during the years ended 31 March, 2012 and 31 March, 2011
        under repos/reverse repos (excluding LAF transactions):
       Year ended 31 March, 2012                                                                                           (` in crores)
                                                        Minimum               Maximum           Daily Average              As at 31
                                                      outstanding           outstanding           outstanding           March, 2012
                                                   during the year       during the year       during the year
      Securities sold under repos
      i. Government Securities                                    -                 122.15               26.31                         -
      ii. Corporate debt Securities                               -                      -                     -                       -
      Securities purchased under reverse repos
      i. Government Securities                                    -               1,952.36              105.45                         -
      ii. Corporate debt Securities                               -                      -                     -                       -




                                                                                                                                     59
       Year ended 31 March, 2011                                                                                   (` in crores)
                                                       Minimum             Maximum         Daily Average            As at 31
                                                     outstanding         outstanding         outstanding         March, 2011
                                                  during the year     during the year     during the year
       Securities sold under repos
       i. Government Securities                                   -             220.00                30.93                    -
       ii. Corporate debt Securities                              -                  -                    -                    -
       Securities purchased under reverse repos
       i. Government Securities                                   -            3,919.82               34.20                    -
       ii. Corporate debt Securities                              -                   -                   -                    -
2.1.16 Details of financial assets sold to Securtisation/Reconstruction companies for Asset Reconstruction:
                                                                                                                  (` in crores)
                                                                                      31 March, 2012          31 March, 2011
       Number of accounts*                                                                         -                       -
       Book value of loan asset securitised*                                                       -                       -
       Aggregate value (net of provisions) of accounts sold                                        -                       -
       Aggregate consideration                                                                     -                       -
       Additional consideration realised in respect of accounts transferred in                     -                       -
       earlier years
       Aggregate gain/loss over net book value                                                         -                       -
       * Excludes 71 accounts already written-off from books amounting to `277.73 crores (Previous year 50 accounts
       amounting to `244.31 crores)
2.1.17 During the years ended 31 March, 2012 and 31 March, 2011 there were no Non-Performing Financial Assets Purchased
       or Sold (excluding accounts previously written off) by the Bank.
2.1.18 Details of securtisation transactions undertaken by the Bank during the year are as follows:
                                                                                                                  (` in crores)
                                                                                      31 March, 2012          31 March, 2011
       Number of loan accounts securitised                                                         -                       3
       Book value of loan assets securitised                                                       -                 301.66
       Sale consideration received for the securtised assets                                       -                 308.97
       Net gain/loss over net book value                                                           -                    7.31
       Net gain/loss recognised in the Profit and Loss Account                                     -                    7.31
       The information on securtisation activity of the Bank as an originator as at 31 March, 2012 and 31 March, 2011 is given
       below:
                                                                                                                  (` in crores)
                                                                                      31 March, 2012          31 March, 2011
       Outstanding credit enhancement (cash collateral)                                            -                       -
       Outstanding liquidity facility                                                              -                       -
       Outstanding servicing liability                                                             -                       -
       Outstanding investment in PTCs                                                              -                       -
2.1.19 The information on concentration of deposits is given below:
                                                                                                                  (` in crores)
                                                                                      31 March, 2012          31 March, 2011
       Total deposits of twenty largest depositors                                            31,117.71             34,540.54
       Percentage of deposits of twenty largest depositors to total deposits                      14.14                  18.25




 60
2.1.20 The information on concentration of advances* is given below:
                                                                                                                      (` in crores)
                                                                                         31 March, 2012           31 March, 2011
       Total advances to twenty largest borrowers                                               40,359.18               42,170.21
       Percentage of advances to twenty largest borrowers to total advances
       of the Bank                                                                                   11.87                   13.63

       * Advances represent credit exposure (funded and non-funded) including derivative exposure as defined by RBI
2.1.21 The information on concentration of exposure* is given below:
                                                                                                                      (` in crores)
                                                                                         31 March, 2012           31 March, 2011
       Total exposure to twenty largest borrowers/customers                                     45,791.99               53,184.01
       Percentage of exposures to twenty largest borrowers/customers to total
       exposure on borrowers/customers                                                               12.29                   15.13

       * Exposure includes credit exposure (funded and non-funded), derivative exposure and investment exposure (including
       underwriting and similar commitments)
2.1.22 During the year, the Bank’s credit exposure to single borrower and group borrowers was within the prudential exposure
       limits prescribed by RBI.
       During the year ended 31 March, 2011, the Bank’s credit exposure to single borrower was within the prudential
       exposure limits prescribed by RBI except in 2 cases, where the single borrower limit was exceeded upto an additional
       exposure of 5%, the details of which are set out below:
                                                                                                               (` in crores)
       Name of the          Period         Original         Limit        % of excess limit Exposure Ceiling Exposure as
       Borrower                           Exposure       Sanctioned      sanctioned over as on 31 March, on 31 March,
                                           Ceiling                        original ceiling      2011           2011
       Housing
       Development
       Finance
       Corporation      Feb 2011 and
       Limited          March 2011         3,346.18        4,227.72           26.34               3,346.18           4,418.99 #
       LIC Housing
       Finance Ltd.@    March 2011         3,346.18        3,563.85            6.51               3,346.18            3,130.77

       # the excess of the limit of `4,227.72 crores over the original exposure ceiling was approved by the Committee of
       Directors. However, the excess of the exposure as on 31 March, 2011 over the limit approved by the Committee is
       subject to ratification of the Committee.
       @ the excess of the limit of `3,563.85 crores over the original exposure ceiling is subject to ratification by the Committee
       of Directors.
       During the year ended 31 March, 2011, the Bank’s credit exposure to group borrowers was within the prudential
       exposure limits prescribed by RBI.




                                                                                                                              61
2.1.23 Details of Risk Category wise Country Exposure:
                                                                                                                                                 (` in crores)
       Risk Category                Exposure (Net) as at               Provision Held as              Exposure (Net) as at             Provision Held as at
                                        31 March, 2012                 at 31 March, 2012                  31 March, 2011                   31 March, 2011
       Insignificant                                 1,877.46                                  -                       459.58                                 -
       Low                                         13,397.86                            9.63                         9,160.68                            4.82
       Moderate                                      2,667.73                                  -                     2,447.75                                 -
       High                                            702.55                                  -                       467.93                                 -
       Very High                                       518.24                                  -                       338.95                                 -
       Restricted                                          0.07                                -                               -                              -
       Off-Credit                                          0.06                                -                               -                              -
       Total                                       19,163.97                            9.63                       12,874.89                             4.82
2.1.24 A maturity pattern of certain items of assets and liabilities at 31 March, 2012 and 31 March, 2011 is set out below:
       Year ended 31 March, 2012                                                                                                                 (` in crores)
                       1 day       2 days to   8 days to   15 days      29 days     Over 3          Over 6      Over 1      Over 3      Over 5        Total
                                    7 days      14 days     to 28      and upto     months          months     year and      years      years
                                                            days       3 months    and upto        and upto     upto 3     and upto
                                                                                   6 months         1 year      years       5 years
       Deposits        1,959.72     7,135.57    7,596.24   7,681.44    23,774.95   25,808.43       53,359.17   18,231.86   13,844.74   60,712.18    220,104.30
       Advances        2,707.12     1,219.95    1,152.06    1,532.15    9,362.88   10,988.78       11,477.47   39,002.39   23,791.70   68,525.04    169,759.54
       Investments     1,815.57     4,967.79    3,691.25   5,874.62    13,506.00    7,463.40       15,172.80   13,743.18    6,997.13   19,960.35     93,192.09
       Borrowings              -     464.44     1,907.21   1,420.21     2,800.74    4,317.12        2,221.73    3,504.87    6,597.90   10,837.45     34,071.67
       Foreign
       Currency
       Assets          1,432.15     1,956.25     629.68      670.58     2,949.75    2,497.41        2,139.05    6,067.84    5,943.49    8,192.57     32,478.77
       Foreign
       Currency
       Liabilities       731.15     3,662.42    2,378.68   2,289.33     5,357.83    4,265.14       4,882.35     2,781.96    6,165.64    4,655.76      37,170.26

       Year ended 31 March, 2011                                                                                                                 (` in crores)
                       1 day       2 days to   8 days to   15 days      29 days     Over 3          Over 6      Over 1      Over 3      Over 5        Total
                                    7 days      14 days     to 28      and upto     months          months     year and      years      years
                                                            days       3 months    and upto        and upto     upto 3     and upto
                                                                                   6 months         1 year      years       5 years
       Deposits        1,645.41     7,423.76    4,835.59    7,521.08   23,528.61   17,930.69       37,057.27   26,810.34   11,866.64   50,618.41    189,237.80
       Advances        2,874.45     3,635.78    1,003.04   2,440.76     9,587.40    8,162.21       11,815.40   35,236.92   19,459.50   48,192.37    142,407.83
       Investments      844.61      1,794.91    3,247.24   4,609.39    10,350.69    5,319.04        9,335.13   13,416.94    8,181.92   14,891.75     71,991.62
       Borrowings        111.49      981.09       44.59    1,293.42     4,934.34   2,384.52         2,537.64    3,648.10   2,036.46     8,296.23     26,267.88
       Foreign
       Currency
       Assets          1,436.87     1,054.10     322.48    1,349.58     2,810.68    3,273.19        2,927.72    4,773.50   4,764.86     3,838.63     26,551.61
       Foreign
       Currency
       Liabilities      760.22      1,620.46      252.12    1,967.77    5,284.18   4,358.29        4,506.45     2,552.87    1,992.27    4,215.22     27,509.85

       Classification of assets and liabilities under the different maturity buckets is based on the same estimates and
       assumptions as used by the Bank for compiling the return submitted to the RBI, which has been relied upon by the
       auditors. Maturity profile of foreign currency assets and liabilities is excluding forward contracts.



 62
2.1.25 Disclosure in respect of Interest Rate Swaps (IRS), Forward Rate Agreement (FRA) and Cross Currency Swaps (CCS)
       outstanding is set out below:
                                                                                                            (` in crores)
       Sr.    Items                                                                      As at 31 March,     As at 31 March,
       No.                                                                                         2012                2011
       i)     Notional principal of swap agreements                                          175,249.08          164,697.20
       ii)    Losses which would be incurred if counterparties failed to fulfill their
              obligations under the agreements                                                  1,799.58           1,444.54
       iii)   Collateral required by the Bank upon entering into swaps                            260.61              123.36
       iv)    Concentration of credit risk arising from the swaps
              Maximum single industry exposure with Banks
              (previous year with Banks)
              - Interest Rate Swaps/FRAs                                                       2,334.72             2,174.95
              - Cross Currency Swaps                                                              461.46              401.53
       v)     Fair value of the swap book (hedging & trading)
              - Interest Rate Swaps/FRAs                                                          315.89                   1.08
              - Currency Swaps                                                                    167.84                  61.09
       The nature and terms of the IRS as on 31 March, 2012 are set out below:
                                                                                                                 (` in crores)
       Nature                      Nos.     Notional Principal Benchmark             Terms
       Hedging                         5                 450.00 MIBOR                Fixed receivable v/s floating payable
       Trading                    1,058               65,107.82 MIBOR                Fixed receivable v/s floating payable
       Trading                    1,020               60,976.02 MIBOR                Fixed payable v/s floating receivable
       Trading                      154                6,161.00 MIFOR                Fixed receivable v/s floating payable
       Trading                      112                4,402.00 MIFOR                Fixed payable v/s floating receivable
       Trading                       60                2,560.10 INBMK                Fixed receivable v/s floating payable
       Trading                       74                4,628.00 INBMK                Fixed payable v/s floating receivable
       Hedging                       21                6,410.25 LIBOR                Fixed receivable v/s floating payable
       Trading                      122                6,120.15 LIBOR                Fixed receivable v/s floating payable
       Trading                      180                8,473.81 LIBOR                Fixed payable v/s floating receivable
       Trading                         1                 150.00 OTHERS               Fixed payable v/s fixed receivable
       Trading                         1                 419.72 LIBOR                Pay cap/receive floor
       Trading                         1                 419.72 LIBOR                Pay floor/receive cap
       Trading                         8                 401.91 LIBOR                Floating payable v/s floating receivable
                                  2,817             166,680.50
       The nature and terms of the IRS as on 31 March, 2011 are set out below:
                                                                                                                 (` in crores)
       Nature                      Nos.     Notional Principal Benchmark             Terms
       Hedging                       13                2,943.27 LIBOR                Fixed receivable v/s floating payable
       Trading                    1,338               63,520.00 MIBOR                Fixed receivable v/s floating payable
       Trading                    1,319               61,967.50 MIBOR                Fixed payable v/s floating receivable
       Trading                      118                4,639.50 MIFOR                Fixed receivable v/s floating payable
       Trading                      101                3,469.00 MIFOR                Fixed payable v/s floating receivable
       Trading                       62                2,621.10 INBMK                Fixed receivable v/s floating payable
       Trading                       73                4,589.00 INBMK                Fixed payable v/s floating receivable



                                                                                                                           63
     Nature                     Nos.     Notional Principal Benchmark             Terms
     Trading                     108                3,575.99 LIBOR                Fixed receivable v/s floating payable
     Trading                     148                5,341.90 LIBOR                Fixed payable v/s floating receivable
     Trading                        1                 150.00 OTHERS               Fixed payable v/s fixed receivable
     Trading                        3                 138.24 LIBOR                Floating payable v/s floating receivable
     Trading                        1                 367.91 LIBOR                Pay cap/receive floor
     Trading                        1                 367.91 LIBOR                Pay floor/receive cap
                               3,286             153,691.32
     The nature and terms of the FRA’s as on 31 March, 2012 are set out below:
                                                                                                              (` in crores)
     Nature                     Nos.     Notional Principal Benchmark             Terms
     Trading                        4                 203.50 LIBOR                Fixed receivable v/s floating payable
     Trading                        9                 508.75 LIBOR                Fixed payable v/s floating receivable
                                   13                 712.25
     The nature and terms of the FRA’s as on 31 March, 2011 are set out below:
                                                                                                              (` in crores)
     Nature                     Nos.     Notional Principal Benchmark             Terms
     Trading                       80               2,990.00 LIBOR                Fixed receivable v/s floating payable
     Trading                       73               2,840.07 LIBOR                Fixed payable v/s floating receivable
                                 153                5,830.07
     The nature and terms of the CCS as on 31 March, 2012 are set out below:
                                                                                                              (` in crores)
     Nature                     Nos.     Notional Principal Benchmark             Terms
     Hedging                        1                  70.21 Principal &          Fixed payable v/s fixed receivable
                                                             Coupon Swap
     Hedging                        1                 254.38 Principal &          Fixed receivable v/s floating payable
                                                             Coupon Swap
     Trading                       34               2,675.41 LIBOR                Fixed payable v/s floating receivable
     Trading                       24               2,133.64 LIBOR                Fixed receivable v/s floating payable
     Trading                        1                  45.79 LIBOR/INBMK          Floating receivable v/s floating payable
     Trading                        4                 215.17 Principal Only       Fixed receivable
     Trading                       25                 982.84 Principal Only       Fixed payable
     Trading                        1                  76.31 Principal Only       Floating payable
     Trading                        1                  76.31 Principal Only       Floating receivable
     Trading                       22               1,326.27 Principal &          Fixed payable v/s fixed receivable
                                                             Coupon Swap
                                 114                7,856.33
     Agreements with Banks/Financial Institutions and corporates are under approved credit lines.




64
The nature and terms of the CCS as on 31 March, 2011 are set out below:
                                                                                                          (` in crores)
Nature                       Nos.    Notional Principal   Benchmark           Terms
Trading                       22              1,728.23    LIBOR               Fixed payable v/s floating receivable
Trading                       21               1,936.15   LIBOR               Fixed receivable v/s floating payable
Hedging                        2                 129.60   LIBOR               Fixed receivable v/s floating payable
Hedging                        3                305.44    Principal &         Fixed receivable v/s fixed payable
                                                          Coupon Swap
Hedging                         1                133.79   LIBOR               Floating receivable v/s floating payable
Trading                         1                 40.14   LIBOR/INBMK         Floating receivable v/s floating payable
Trading                         5                428.65   Principal &         Fixed payable v/s fixed receivable
                                                          Coupon Swap
Trading                         2                 97.87   Principal Only      Fixed receivable
Trading                         8                242.16   Principal Only      Fixed payable
Trading                         1                 66.89   Principal Only      Floating receivable
Trading                         1                 66.89   Principal Only      Floating payable
                               67              5,175.81
Agreements with Banks/Financial Institutions and corporates are under approved credit lines.
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2012 are set out below:
                                                                                                        (` in crores)
Sr. No.   Particulars                                                                          As at 31 March, 2012
i)        Notional principal amount of exchange traded interest rate derivatives
          undertaken during the year
          91 day T-Bill - July 11                                                                                5.04
                                                                                                                 5.04
ii)       Notional principal amount of exchange traded interest rate derivatives                                       -
          outstanding as on 31 March, 2012
                                                                                                                       -
iii)      Notional principal amount of exchange traded interest rate derivatives
          outstanding as on 31 March, 2012 and “not highly effective”                                            N.A.
iv)       Mark-to-market value of exchange traded interest rate derivatives
          outstanding as on 31 March, 2012 and “not highly effective”                                            N.A.
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2011 are set out below:
                                                                                                        (` in crores)
Sr. No.   Particulars                                                                          As at 31 March, 2011
i)        Notional principal amount of exchange traded interest rate derivatives
          undertaken during the year
          90 day Euro $ Future - June 10                                                                        17.84
          10 years 7% GOI Security - June 10                                                                     2.92
                                                                                                                20.76
ii)       Notional principal amount of exchange traded interest rate derivatives
          outstanding as on 31 March, 2011
          90 Day Euro $ Futures - June 11                                                                        4.46
                                                                                                                 4.46
iii)      Notional principal amount of exchange traded interest rate derivatives
          outstanding as on 31 March, 2011 and “not highly effective”                                            N.A.
iv)       Mark-to-market value of exchange traded interest rate derivatives
          outstanding as on 31 March, 2011 and “not highly effective”                                            N.A.



                                                                                                                  65
2.1.26 Disclosure on risk exposure in Derivatives
       Qualitative disclosures:
       (a) Structure and organisation for management of risk in derivatives trading, the scope and nature of risk
           measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating risk
           and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:
           Derivatives are financial instruments whose characteristics are derived from an underlying asset, or from interest
           and exchange rates or indices. The Bank undertakes over the counter and Exchange Traded derivative transactions
           for Balance Sheet management and also for proprietary trading/market making whereby the Bank offers derivative
           products to the customers to enable them to hedge their earnings risks within the prevalent regulatory guidelines.
           Proprietary trading includes Interest Rate Futures, Currency Futures and Rupee Interest Rate Swaps under different
           benchmarks (viz. MIBOR, MIFOR and INBMK), and Currency Options for USD/INR pair (both OTC and exchange
           traded). The Bank also undertakes transactions in Cross Currency Swaps, Principal Only Swaps, Coupon Only
           Swaps, and Long Term Forex Contracts (LTFX) for hedging its Balance Sheet and also offers them to its customers.
           These transactions expose the Bank to various risks, primarily credit, market and operational risk. The Bank has
           adopted the following mechanism for managing risks arising out of the derivative transactions.
           There is a functional separation between the Treasury Front Office, Risk and Treasury Back Office to undertake
           derivative transactions. The derivative transactions are originated by Treasury Front Office, which ensures
           compliance with the trade origination requirements as per the Bank’s policy and the RBI guidelines. The Market
           Risk Group within the Bank’s Risk Department independently identifies, measures and monitors the market risks
           associated with derivative transactions and appraises the Asset Liability Management Committee (ALCO) and the
           Risk Management Committee of the Board (RMC) on the compliance with the risk limits. The Treasury Back Office
           undertakes activities such as confirmation, settlement, ISDA documentation, accounting and other MIS reporting.
           The derivative transactions are governed by the derivative policy, market risk management policy, hedging policy
           and the suitability and appropriateness policy of the Bank as well as by the extant RBI guidelines. The Bank has also
           put in place a detailed process flow for customer derivative transactions for effective management of operational
           risk/reputation risk.
           Various risk limits are set up and actual exposures are monitored vis-à-vis the limits. These limits are set up
           taking into account market volatility, business strategy and management experience. Risk limits are in place for
           risk parameters viz. PV01, VaR, stop loss, Delta, Gamma and Vega. Actual positions are monitored against these
           limits on a daily basis and breaches, if any, are reported promptly. Risk assessment of the portfolio is undertaken
           periodically. The Bank ensures that the Gross PV01 (Price value of a basis point) position arising out of all non-
           option rupee derivative contracts are within 0.25% of net worth of the Bank as on Balance Sheet date.
           Hedging transactions are undertaken by the Bank to protect the variability in the fair value or the cash flow of the
           underlying Balance Sheet item. These deals are accounted on an accrual basis except the swap designated with
           an asset/liability that is carried at market value or lower of cost or market value. In that case, the swap is marked
           to market with the resulting gain or loss recorded as an adjustment to the market value of designated asset or
           liability. These transactions are tested for hedge effectiveness and in case any transaction fails the test, the same
           is re-designated as a trading deal with the approval of the competent authority and appropriate accounting
           treatment is followed.
       (b) Accounting policy for recording hedge and non-hedge transactions, recognition of income, premiums
           and discounts, valuation of outstanding contracts
           The Hedging Policy approved by the RMC governs the use of derivatives for hedging purpose. Subject to the
           prevailing RBI guidelines, the Bank deals in derivatives for hedging fixed rate and floating rate coupon or foreign
           currency assets/liabilities. Transactions for hedging and market making purposes are recorded separately. For
           hedge transactions, the Bank identifies the hedged item (asset or liability) at the inception of the transaction
           itself. The effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. Hedge
           derivative transactions are accounted for in accordance with the hedge accounting principles. Derivatives for



 66
    market making purpose are marked to market and the resulting gain/loss is recorded in the Profit and Loss
    Account. The premium on option contracts is accounted for as per FEDAI guidelines. Derivative transactions
    are covered under International Swaps and Derivatives Association (ISDA) master agreements with respective
    counterparties. The exposure on account of derivative transactions is computed as per the RBI guidelines and is
    marked against the credit limits approved for the respective counterparties.
(c) Provisioning, collateral and credit risk mitigation
    Derivative transactions comprise of swaps and options which are disclosed as contingent liabilities. The swaps are
    categorised as trading or hedging and all the options are categorised as the trading book. Trading swaps/options
    are revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Profit and
    Loss Account and correspondingly in other assets or other liabilities respectively. Hedged swaps are accounted for
    as per the RBI guidelines. Pursuant to the RBI guidelines, any receivables (crystallised receivables as well as positive
    MTM) under derivatives contracts, which remain overdue for more than 90 days, are reversed through the Profit
    and Loss Account and are held in a separate suspense account.
    Collateral requirements for derivative transactions are laid down as part of credit sanction terms on a case by case
    basis. Such collateral requirements are determined, based on usual credit appraisal process. The Bank retains the
    right to terminate transactions as a risk mitigation measure in certain cases.
    The credit risk in respect of customer derivative transactions is sought to be mitigated through a laid down policy
    on sanction of Loan Equivalent Risk (LER) limits, monitoring mechanism for LER limits and trigger events for
    escalation/margin calls/termination.
Quantitative Disclosure:
                                                                                                               (` in crores)
                                                                               As at 31 March, 2012
                                                                        Currency Derivatives                Interest rate
                                                                                                             Derivatives
                                                                Forward           CCS         Options
Sr. No. Particulars                                             Contracts
1         Derivatives (Notional Principal Amount)
          a) For hedging                                         6,737.20          324.59              -        6,860.25
          b) For trading                                       194,188.30        7,531.74      12,511.44      160,532.50
2         Marked to Market Positions #
          a) Asset (+)                                              158.08         184.07          6.10             36.69
          b) Liability (-)                                               -              -             -                 -
3         Credit Exposure @                                       7,696.90       1,213.66        264.01          2,776.65
4         Likely impact of one percentage change in
          interest rate (100*PV01) (as at 31 March,
          2012)
          a) on hedging derivatives                                    0.14         12.53              -           283.14
          b) on trading derivatives                                    1.66         48.73           1.69            72.38
5         Maximum and Minimum of 100*PV01
          observed during the year
          a) on hedging
             I) Minimum                                                   -          0.02               -          127.34
             II) Maximum                                               0.86         12.66               -          286.69
          b) on trading
             I) Minimum                                                0.01          0.02           1.26             2.14
             II) Maximum                                               3.16         88.77           7.17            92.70
# Only on trading derivatives and represents net position
@
  Includes accrued interest



                                                                                                                       67
                                                                                                                   (` in crores)
                                                                                      As at 31 March, 2011
                                                                               Currency Derivatives              Interest rate
                                                                                                                  Derivatives
                                                                         Forward       CCS        Options
       Sr. No.      Particulars                                          Contracts
       1            Derivatives (Notional Principal Amount)
                    a) For hedging                                        4,470.91     568.82               -         2,943.27
                    b) For trading                                   180,972.90       4,606.99    13,130.44         156,578.12
       2            Marked to Market Positions     #


                    a) Asset (+)                                             116.17      35.82              -                  -
                    b) Liability (-)                                              -          -         (4.62)           (74.03)
       3            Credit Exposure     @
                                                                           6,954.12    760.80         285.87          2,541.95
       4            Likely impact of one percentage change in
                    interest rate (100*PV01) (as at 31 March,
                    2011)
                    a) on hedging derivatives                                 0.44        0.27              -           135.82
                    b) on trading derivatives                                 0.28        0.38              -            38.56
       5            Maximum and Minimum of 100*PV01
                    observed during the year
                    a) on hedging
                        I) Minimum                                            0.03        0.06              -            75.82
                        II) Maximum                                          15.01        1.83              -           178.55
                    b) on trading
                       I) Minimum                                             0.05        0.08              -            30.31
                       II) Maximum                                            2.31        0.92              -           137.59
       # Only on trading derivatives and represents net position
       @
            Includes accrued interest

       Pursuant to RBI guidelines, the Bank has started dealing in Exchange Traded Currency Options. The outstanding
       notional principal amount of these derivatives as at 31 March, 2012 was `542.91 crores (previous year `995.42 crores)
       and the mark-to-market value was `5.67 crores (previous year `5.44 crores)
2.1.27 During the year ended 31 March, 2012, RBI levied a penalty of `0.15 crores on the Bank for non-compliance of certain
       instructions relating to derivative transactions. The Bank has paid the penalty of `0.15 crores on 5 May, 2011.
       No penalty/strictures have been imposed on the Bank in the previous year by the RBI.
2.1.28 Disclosure of Customer Complaints

                                                                                       31 March, 2012           31 March, 2011
       a.       No. of complaints pending at the beginning of the year                                16                     80
       b.       No. of complaints received during the year                                       12,205                 12,766
       c.       No. of complaints redressed during the year                                      12,183                 12,830
       d.       No. of complaints pending at the end of the year                                      38                     16
       The above information is as certified by the Management and relied upon by the auditors.



 68
2.1.29 Disclosure of Awards passed by the Banking Ombudsman

                                                                                        31 March, 2012          31 March, 2011
       a.    No. of unimplemented awards at the beginning of the year                                -                       -
       b.    No. of awards passed by the Banking Ombudsman during the year                           1                       2
       c.    No. of awards implemented during the year                                               1                       2
       d.    No. of unimplemented awards at the end of the year                                      -                       -
     The above information is as certified by the Management and relied upon by the auditors.
2.1.30 Draw Down from Reserves
       The Bank has not undertaken any draw down from reserves during the year. During the year ended 31 March, 2011,
       the Bank made a draw down out of the investment reserves account towards depreciation in investments in AFS and
       HFT categories in terms of RBI guidelines.
2.1.31 a)   During the year ended 31 March, 2011, an amount of `338.85 crores being 10% of the net profit for that year
            was transferred to the general reserve in terms of the provisions of the Transfer of Profits to Reserve Rules under
            the Companies Act, 1956. During the current year, the Bank has been advised by RBI that in respect of transfer of
            profits to reserve fund, the Bank should be guided by the provisions of Section 17(1) of the Banking Regulation
            Act, 1949 relating to transfer to Statutory Reserve. Accordingly, no appropriation is proposed to be made to the
            general reserve for the current year.
       b)   During the current year, pursuant to receipt of final installment from the Government of India under the Agricultural
            Debt Waiver and Debt Relief Scheme, 2008, an amount of `0.85 crores being the provision held for loss in present
            value terms on the claim amount, has been transferred to the General Reserve in accordance with RBI guidelines.
2.1.32 Letter of Comfort
       The Bank has not issued any Letter of Comfort (LoC) on behalf of its subsidiaries.
2.1.33 Bancassurance Business
       Details of income earned from bancassurance business are as under:
                                                                                                                    (` in crores)
       Sr. No.    Nature of Income*                                                     31 March, 2012          31 March, 2011
       1.         For selling life insurance policies                                          258.62                  133.27
       2.         For selling non-life insurance policies                                        31.33                  23.04
       3.         For selling mutual fund products                                               57.66                  44.34
       4.         Others (selling of online trading accounts, gold coins, wealth                 24.67                   28.72
                  advisory, RBI and other bonds)
                  Total                                                                           372.28                 229.37
       *includes receipts on account of marketing activities undertaken on behalf of bancassurance partners
2.1.34 The Bank has not sponsored any special purpose vehicle which is required to be consolidated in the consolidated
       financial statements as per accounting norms.
2.1.35 Amount of total assets, non-performing assets and revenue of overseas branches is given below:
                                                                                                                    (` in crores)
       Particulars                                                                      31 March, 2012          31 March, 2011
       Total assets                                                                         32,302.40               23,627.07
       Total NPAs                                                                                 0.51                       -
       Total revenue                                                                          1,628.02                1,108.07
2.1.36 During the current year, the value of sales/transfers of securities to/from HTM category (excluding one-time transfer of
       securities and sales to RBI under OMO auctions) was within 5% of the book value of investments held in HTM category
       at the beginning of the year.



                                                                                                                            69
2.2     Other disclosures
2.2.1   During the year, the Bank has appropriated `38.22 crores (previous year `4.76 crores), net of taxes and transfer to
        statutory reserve to the Capital Reserve, being the gain on sale of HTM investments in accordance with RBI guidelines.
        As advised by the RBI during the year, the Bank has also appropriated `13.68 crores, net of taxes and transfer to
        statutory reserve, being the profit earned on sale of premises to the Capital Reserve.
2.2.2 Earnings Per Share (‘EPS’)
        The details of EPS computation is set out below:

                                                                                         31 March, 2012         31 March, 2011
         Basic and Diluted earnings for the year (Net profit after tax) (` in crores)          4,242.21              3,388.49
         Basic weighted average no. of shares (in crores)                                         41.21                 40.85
         Add: Equity shares for no consideration arising on grant of stock options                 0.30                   0.67
         under ESOP (in crores)
         Diluted weighted average no. of shares (in crores)                                         41.51                 41.52
         Basic EPS (`)                                                                             102.94                 82.95
         Diluted EPS (`)                                                                           102.20                 81.61
         Nominal value of shares (`)                                                                10.00                 10.00
        Dilution of equity is on account of 2,991,727 (previous year 6,721,352) stock options.
2.2.3 Employee Stock Options Scheme (‘the Scheme’)
        In February 2001, pursuant to the approval of the shareholders at the Extraordinary General Meeting, the Bank
        approved an Employee Stock Option Scheme. Under the Scheme, the Bank is authorised to issue upto 13,000,000
        equity shares to eligible employees. Eligible employees are granted an option to purchase shares subject to vesting
        conditions. The options vest in a graded manner over 3 years. The options can be exercised within 3 years from the
        date of the vesting. Further, over the period June 2004 to June 2010, pursuant to the approval of the shareholders at
        Annual General Meetings, the Bank approved an ESOP scheme for additional options aggregating 27,517,400. Within
        the overall ceiling of 40,517,400 stock options approved for grant by the shareholders as stated earlier, the Bank is also
        authorised to issue options to employees and directors of the subsidiary companies.
        36,622,890 options have been granted under the Scheme till the previous year ended 31 March, 2011.
        On 22 April, 2011, the Bank granted 3,096,500 stock options (each option representing entitlement to one equity
        share of the Bank) to its employees including the MD & CEO and 172,200 stock options to employees of Axis Asset
        Management Company Limited, a subsidiary of the Bank. These options can be exercised at a price of `1,447.55 per
        option.
        Stock option activity under the Scheme for the year ended 31 March, 2012 is set out below:

                                                         Options              Range of        Weighted      Weighted average
                                                     outstanding         exercise prices       average             remaining
                                                                                      (`)      exercise       contractual life
                                                                                               price (`)              (Years)
        Outstanding at the beginning of the year        11,122,518    232.10 to 1,245.45          712.90                     2.86
        Granted during the year                         3,268,700               1,447.55        1,447.55                          -
        Forfeited during the year                        (243,596)    232.10 to 1,447.55          960.75                          -
        Expired during the year                            (61,265)    232.10 to 468.90          406.46                           -
        Exercised during the year                      (2,658,109)    232.10 to 1,159.30          512.92                          -
        Outstanding at the end of the year             11,428,248 319.00 to 1,447.55             965.90                      2.79
        Exercisable at the end of the year              4,983,892 319.00 to 1,245.45              717.76                     1.53
        The weighted average share price in respect of options exercised during the year was `1,200.12.




 70
Stock option activity under the Scheme for the year ended 31 March, 2011 is set out below:

                                                  Options              Range of        Weighted          Weighted average
                                              outstanding         exercise prices       average                 remaining
                                                                               (`)      exercise           contractual life
                                                                                        price (`)                  (Years)
Outstanding at the beginning of the year         13,897,518     97.62 to 907.25           514.27                      2.87
Granted during the year                           2,915,200 1,159.30 to 1,245.45        1,163.05                          -
Forfeited during the year                         (295,348) 232.10 to 1,214.80            658.88                          -
Expired during the year                             (23,128)    97.62 to 319.00           264.72                          -
Exercised during the year                       (5,371,724)     97.62 to 824.40          448.22                           -
Outstanding at the end of the year              11,122,518 232.10 to 1,245.45             712.90                      2.86
Exercisable at the end of the year                4,479,300    232.10 to 907.25           525.53                      1.49
The weighted average share price in respect of options exercised during the year was `1,324.47.
Fair Value Methodology
Applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’ the
impact on reported net profit and EPS would be as follows:


                                                                                     31 March, 2012         31 March, 2011
 Net Profit (as reported) (` in crores)                                                    4,242.21              3,388.49
 Add: Stock based employee compensation expense
 included in net income (` in crores)                                                                -                    -
 Less: Stock based employee compensation expense determined under fair
 value based method (proforma) (` in crores)                                                 (147.16)              (107.97)
 Net Profit (Proforma) (` in crores)                                                        4,095.05              3,280.52
 Earnings per share: Basic (in ` )
 As reported                                                                                  102.94                 82.95
 Proforma                                                                                      99.37                 80.31
 Earnings per share: Diluted (in `)
 As reported                                                                                  102.20                 81.61
 Proforma                                                                                      98.65                 79.01
The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with
the following assumptions:

                                                                               31 March, 2012               31 March, 2011
 Dividend yield                                                                        1.23%               1.24% to 1.32%
 Expected life                                                                      2-4 years                     2-4 years
 Risk free interest rate                                                      8.05% to 8.10%               5.98% to 7.17%
 Volatility                                                                 39.43% to 53.33%             54.72% to 61.66%
Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period.
The measure of volatility used in the Black-Scholes options pricing model is the annualised standard deviation of the
continuously compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility
of the stock prices on the National Stock Exchange, over a period prior to the date of grant, corresponding with the
expected life of the options has been considered.
The weighted average fair value of options granted during the year ended 31 March, 2012 is `559.31 (previous year
`485.98).




                                                                                                                        71
2.2.4 Dividend paid on shares issued on exercise of stock options
       The Bank may allot shares between the Balance Sheet date and record date for the declaration of dividend pursuant to
       the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31 March,
       2012, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in
       the current year.
       Appropriation to proposed dividend during the year ended 31 March, 2012 includes dividend of `1.88 crores (previous
       year `2.47 crores) paid pursuant to exercise of 1,153,890 employee stock options after the previous year end but
       before the record date for declaration of dividend for the year ended 31 March, 2011.
2.2.5 Segmental reporting
       The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking and
       Other Banking Business. These segments have been identified based on the RBI’s revised guidelines on Segment
       Reporting issued on 18 April, 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The principal activities of
       these segments are as under.

        Segment                           Principal Activities
        Treasury                          Treasury operations include investments in sovereign and corporate debt, equity
                                          and mutual funds, trading operations, derivative trading and foreign exchange
                                          operations on the proprietary account and for customers and central funding.
        Retail Banking                    Constitutes lending to individuals/small businesses subject to the orientation,
                                          product and granularity criterion and also includes low value individual exposures
                                          not exceeding the threshold limit of `5 crores as defined by RBI. Retail Banking
                                          activities also include liability products, card services, internet banking, ATM
                                          services, depository, financial advisory services and NRI services.
        Corporate/Wholesale Banking       Includes corporate relationships not included under Retail Banking, corporate
                                          advisory services, placements and syndication, management of public issue, project
                                          appraisals, capital market related services and cash management services.
        Other Banking Business            Includes para banking activities like third party product distribution and other
                                          banking transactions not covered under any of the above three segments.
       Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and interest
       income on the investment portfolio. The principal expenses of the segment consist of interest expense on funds
       borrowed from external sources and other internal segments, premises expenses, personnel costs, other direct
       overheads and allocated expenses.
       Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given to customers
       falling under this segment and fees arising from transaction services and merchant banking activities such as syndication
       and debenture trusteeship. Revenues of the Retail Banking segment are derived from interest earned on loans classified
       under this segment and fees for banking and advisory services, ATM interchange fees and cards products. Expenses of
       the Corporate/Wholesale Banking and Retail Banking segments primarily comprise interest expense on deposits and
       funds borrowed from other internal segments, infrastructure and premises expenses for operating the branch network
       and other delivery channels, personnel costs, other direct overheads and allocated expenses.
       Segment income includes earnings from external customers and from funds transferred to the other segments.
       Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any, for that
       segment. Segment-wise income and expenses include certain allocations. Inter segment interest income and interest
       expense represent the transfer price received from and paid to the Central Funding Unit (CFU) respectively. For this
       purpose, the funds transfer pricing mechanism presently followed by the Bank, which is based on historical matched
       maturity and market-linked benchmarks, has been used. Operating expenses other than those directly attributable to
       segments are allocated to the segments based on an activity-based costing methodology. All activities in the Bank are
       segregated segment-wise and allocated to the respective segment.




 72
Segmental results are set out below:
                                                                                                      (` in crores)

                                                                          31 March, 2012

                                                   Treasury      Corporate/     Retail      Other       Total
                                                                 Wholesale     Banking     Banking
                                                                  Banking                  Business

Segment Revenue

Gross interest income (external customers)           5,992.51     11,292.20     4,709.94          -    21,994.65

Other income                                         1,003.66      2,800.89     1,238.86     376.81     5,420.22

Total income as per Profit and Loss Account          6,996.17     14,093.09    5,948.80      376.81    27,414.87

Add/(less) inter segment interest income            28,992.40      3,093.62     7,274.96       0.15     39,361.13

Total segment revenue                              35,988.57      17,186.71    13,223.76     376.96    66,776.00

Less: Interest expense (external customers)          8,747.14        214.71     5,015.05          -    13,976.90

Less: Inter segment interest expense                25,817.89      9,335.77     4,207.43       0.04     39,361.13

Less: Operating expenses                               426.36       1,735.51    3,759.65      85.58      6,007.10

Operating profit                                       997.18      5,900.72      241.63      291.34     7,430.87

Less: Provision for non-performing assets/Others       160.78        735.59      246.30        0.36      1,143.03

Segment result                                        836.40       5,165.13       (4.67)    290.98      6,287.84

Less: Provision for tax                                                                                 2,045.63

Extraordinary profit/loss                                                                                          -

Net Profit                                                                                              4,242.21

Segment assets                                     108,39 4.17    117,647.10   58,258.41     168.65   284,468.33

Unallocated assets                                                                                       1,159.46

Total assets                                                                                          285,627.79

Segment liabilities                                116,445.51      51,261.01   94,305.75      19.49   262,031.76

Unallocated liabilities                                                                                    787.49

Total liabilities                                                                                     262,819.25

Net assets                                         (8,051.34)     66,386.09 (36,047.34)      149.16   22,808.54

Capital expenditure for the year                        20.30         97.03       213.74       5.19       336.26

Depreciation on fixed assets for the year               20.67         98.75       217.54       5.28       342.24




                                                                                                              73
                                                                                                                  (` in crores)
                                                                                   31 March, 2011
                                                           Treasury      Corporate/      Retail        Other        Total
                                                                         Wholesale      Banking       Banking
                                                                          Banking                     Business
     Segment Revenue
     Gross interest income (external customers)              4,751.66        7,082.97    3,320.18             -    15,154.81
     Other income                                            1,123.01       2,289.45         990.46     229.21       4,632.13
     Total income as per Profit and Loss Account             5,874.67       9,372.42     4,310.64       229.21     19,786.94
     Add/(less) inter segment interest income               18,542.03       2,378.68     5,015.45         0.48     25,936.64
     Total segment revenue                                  24,416.70       11,751.10    9,326.09       229.69     45,723.58
     Less: Interest expense (external customers)             5,327.18         147.61     3,115.40         1.63       8,591.82
     Less: Inter segment interest expense                   17,832.24       5,554.07     2,550.33             -    25,936.64
     Less: Operating expenses                                  384.54       1,440.48     2,857.20        97.21       4,779.43
     Operating profit                                          872.74       4,608.94         803.16     130.85      6,415.69
     Less: Provision for non-performing assets/Others          140.53         725.89         412.86       0.75       1,280.03
     Segment result                                            732.21       3,883.05         390.30     130.10      5,135.66
     Less: Provision for tax                                                                                         1,747.17
     Extraordinary profit/loss                                                                                                -
     Net Profit                                                                                                     3,388.49
     Segment assets                                         94,475.32    104,302.26     42,896.68       176.07    241,850.33
     Unallocated assets                                                                                               863.04
     Total assets                                                                                                 242,713.37
     Segment liabilities                                   105,392.45     46,462.90     71,094.88        24.31    222,974.54
     Unallocated liabilities                                                                                           740.00
     Total liabilities                                                                                            223,714.54
     Net assets                                            (10,917.13)    57,839.36 (28,198.20)         151.76     18,998.83
     Capital expenditure for the year                           41.95         468.42         859.89      24.58      1,394.84
     Depreciation on fixed assets for the year                   8.72          97.25         178.52       5.10        289.59

     Geographic Segments
                                                                                                                  (` in crores)
                                    Domestic                       International                          Total
                               31 March,       31 March,       31 March,         31 March,       31 March,         31 March,
                                   2012            2011            2012              2011            2012              2011
     Revenue                   25,786.85       18,678.87         1,628.02         1,108.07        27,414.87        19,786.94
     Assets                253,325.39       219,086.30         32,302.40         23,627.07      285,627.79        242,713.37




74
2.2.6 Related party disclosure

       The related parties of the Bank are broadly classified as:

       a)    Promoters

             The Bank has identified the following entities as its Promoters.

	      	     •	   Administrator	of	the	Specified	Undertaking	of	the	Unit	Trust	of	India	(UTI-1)

	      	     •	   Life	Insurance	Corporation	of	India	(LIC)

	      	     •	   General	 Insurance	 Corporation	 and	 four	 Government-owned	 general	 insurance	 companies	 -	 New	 India	
                  Assurance Co. Ltd., National Insurance Co. Ltd., United India Insurance Co. Ltd. and The Oriental Insurance
                  Co. Ltd.

       b)    Key Management Personnel

	      	     •	   Mrs.	Shikha	Sharma	(Managing	Director	&	Chief	Executive	Officer)

	      	     •	   Mr.	Sisir	Kumar	Chakrabarti	(Deputy	Managing	Director)	upto	30	September,	2011.

       c)    Relatives of Key Management Personnel

             Mr. Sanjaya Sharma, Mrs. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr.
             Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Mrs. Swapna Chakraborty, Mr. Hirendra Nath
             Chakraborty, Mr. Rajat Chakraborty, Mrs. Devikalpa Chakraborty (Kundu), Master Ahan Chakraborty, Mr.
             Nabakumar Chakraborty, Mr. Prabir Chakraborty, Mrs. Minati Chakraborty, Mrs. Krishna Chakraborty, Mrs. Sipra
             Chakraborty, Mrs. Shikha Bhattacharya, Ms. Shila Chakraborty, Mr. Asim Kumar Chakraborty, Mr. Arunabha
             Bhattacharya.

       d)    Subsidiary Companies

	      	     •	   Axis	Securities	and	Sales	Limited

	      	     •	   Axis	Private	Equity	Limited

	      	     •	   Axis	Trustee	Services	Limited

	      	     •	   Axis	Asset	Management	Company	Limited

	      	     •	   Axis	Mutual	Fund	Trustee	Limited

	      	     •	   Axis	U.K.	Limited

       e)    Associate

	      	     •	   Bussan	Auto	Finance	India	Private	Limited

                  The above investment does not fall within the definition of a Joint Venture as per AS-27, Financial Reporting
                  of Interest in Joint Ventures, notified under the Companies (Accounting Standards) Rules, 2006, and the
                  said accounting standard is thus not applicable. However, pursuant to RBI guidelines, the Bank has classified
                  the same as investment in joint ventures in the Balance Sheet. Such investment has been accounted as an
                  Associate in Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules,
                  2006. Based on RBI guidelines, details of transactions with Associates are not disclosed since there is only
                  one entity/party in this category.




                                                                                                                          75
     The details of transactions of the Bank with its related parties during the year ended 31 March, 2012 are given below:
                                                                                                               (` in crores)
     Items/Related Party                           Promoters             Key          Relatives Subsidiaries         Total
                                                                 Management             of Key
                                                                   Personnel       Management
                                                                                     Personnel
     Dividend paid                                     214.22              0.06                 -               -   214.28
     Dividend received                                       -                 -                -           1.13       1.13
     Interest paid                                     540.45              0.01             0.03            7.72    548.21
     Interest received                                    0.02             0.01                 -               -     0.03
     Investment of the Bank                                  -                 -                -         90.00      90.00
     Investment of related party in the Bank                 -             1.84                 -               -     1.84
     Investment of related party in Subordinated
     Debt/Hybrid Capital of the Bank                         -                 -                -               -          -
     Redemption of subordinated debt                         -                 -                -               -          -
     Purchase of investments                                 -                 -                -               -          -
     Sale of investments                               244.81                  -                -               -   244.81
     Management contracts                                    -             5.51                 -           6.90     12.41
     Contribution to employee benefit fund               13.75                 -                -               -    13.75
     Purchase of fixed assets                                -                 -                -               -          -
     Sale of fixed assets                                    -                 -                -               -          -
     Non-funded commitments                                  -                 -                -         16.00      16.00
     Advance granted (net)                                0.64                 -                -               -     0.64
     Advance repaid                                          -             0.03                 -               -     0.03
     Receiving of services                               51.49                 -                -        140.95     192.44
     Rendering of services                                1.65                 -                -          12.54     14.19
     Other reimbursements from related party                 -                 -                -          10.29     10.29
     Other reimbursements to related party                1.02                 -                -           1.68      2.70

     The balances payable to/receivable from the related parties of the Bank as on 31 March, 2012 are given below:
                                                                                                               (` in crores)
     Items/Related Party                           Promoters             Key    Relatives Subsidiaries               Total
                                                                 Management       of Key
                                                                   Personnel Management
                                                                               Personnel
     Borrowings from the Bank                                -                 -                -              -           -
     Deposits with the Bank                          5,693.55              0.31             0.26         116.62 5,810.74
     Placement of deposits                                0.16                 -                -              -       0.16
     Advances                                           43.65              0.24                 -              -     43.89
     Investment of the Bank                                  -                 -                -        310.55     310.55
     Investment of related party in the Bank           154.44              0.02                 -              -    154.46
     Non-funded commitments                               3.01                 -                -         16.00      19.01




76
                                                                                                           (` in crores)
Items/Related Party                           Promoters              Key    Relatives Subsidiaries                Total
                                                             Management       of Key
                                                               Personnel Management
                                                                           Personnel
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                  2,837.30                  -                -               - 2,837.30
Advance for rendering of services                        -                 -                -               -           -
Other receivables                                        -                 -                -          34.51     34.51
Other payables                                           -                 -                -          21.16      21.16
The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
2012 are given below:
                                                                                                    (` in crores)
Items/Related Party                           Promoters              Key    Relatives Subsidiaries                Total
                                                             Management       of Key
                                                               Personnel Management
                                                                           Personnel
Borrowings from the Bank                                 -                 -                -               -           -
Deposits with the Bank                           5,693.55              1.24             2.70         185.02 5,882.51
Placement of deposits                                 0.16                 -                -               -      0.16
Advances                                            48.22              0.27                 -               -    48.49
Investment of the Bank                                   -                 -                -        310.55     310.55
Investment of related party in the Bank            155.12              0.05                 -               -   155.17
Non-funded commitments                                3.01                 -                -         16.00       19.01
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                  2,837.30                  -                -               - 2,837.30
Other receivables                                        -                 -                -         34.51      34.51
Other payables                                           -                 -                -         22.77      22.77
The details of transactions of the Bank with its related parties during the year ended 31 March, 2011 are given below:
                                                                                                           (` in crores)
Items/Related Party                           Promoters              Key    Relatives Subsidiaries                Total
                                                             Management       of Key
                                                               Personnel Management
                                                                           Personnel
Dividend paid                                      184.65              0.03                 -               -   184.68
Dividend received                                        -                 -                -           0.75       0.75
Interest paid                                      389.65              0.07             0.04            3.23    392.99
Interest received                                     0.22             0.02                 -           0.01       0.25
Investment of the Bank                                   -                 -                -        106.00     106.00
Investment of related party in the Bank                  -             2.28                 -               -      2.28
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                          -                 -                -               -           -




                                                                                                                   77
                                                                                                              (` in crores)
     Items/Related Party                           Promoters              Key    Relatives Subsidiaries             Total
                                                                  Management       of Key
                                                                    Personnel Management
                                                                                Personnel
     Redemption of Subordinated Debt                         -                -                -              -           -
     Purchase of investments                            10.24                 -                -              -     10.24
     Sale of investments                               563.21                 -                -              -   563.21
     Management contracts                                    -           5.46*                 -          4.68      10.14
     Purchase of fixed assets                                -                -                -              -           -
     Non-funded commitments                              0.01                 -                -              -      0.01
     Advance granted (net)                                   -                -                -              -           -
     Advance repaid                                          -            0.12                 -              -       0.12
     Sale of fixed assets                                    -                -                -              -           -
     Contribution to employee benefit fund              15.22                 -                -              -     15.22
     Receiving of services                              30.18                 -                -        105.33     135.51
     Rendering of services                               2.51                 -                -         10.88      13.39
     Other reimbursements to related party                0.15                -                -          0.54       0.69
     Other reimbursements from related party                 -                -                -          5.66       5.66

     *includes `0.70 crores subject to approval of Shareholders
     The balances payable to/receivable from the related parties of the Bank as on 31 March, 2011 are given below:
                                                                                                             (` in crores)
     Items/Related Party                           Promoters              Key    Relatives Subsidiaries             Total
                                                                  Management       of Key
                                                                    Personnel Management
                                                                                Personnel
     Borrowings from the Bank                                -                -                -              -           -
     Deposits with the Bank                          4,716.08             0.23             0.23          71.37 4,787.91
     Placement of deposits                                0.16                -                -              -       0.16
     Advances                                           43.00             0.27                 -              -     43.27
     Investment of the Bank                                  -                -                -        220.55    220.55
     Investment of related party in the Bank           152.78             0.04                 -              -   152.82
     Non-funded commitments                              3.01                 -                -              -      3.01
     Investment of related party in Subordinated
     Debt/Hybrid Capital of the Bank                 2,825.00                 -                -              - 2,825.00
     Advance for rendering of services                       -                -                -              -           -
     Other receivables                                       -                -                -          0.57       0.57
     Other payables                                          -                -                -         14.27      14.27




78
      The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
      2011 are given below:
                                                                                                          (` in crores)
      Items/Related Party                            Promoters               Key    Relatives Subsidiaries            Total
                                                                     Management       of Key
                                                                       Personnel Management
                                                                                   Personnel
      Borrowings from the Bank                                   -              -               -               -            -
      Deposits with the Bank                            4,716.09             3.94           4.96            81.85 4,806.84
      Placement of deposits                                   0.16              -               -               -      0.16
      Advances                                              132.47           0.39               -            0.31    133.17
      Investment of the Bank                                     -              -               -          220.55    220.55
      Investment of related party in the Bank               156.15           0.04               -               -    156.19
      Investment of related party in Subordinated
      Debt/Hybrid Capital of the Bank                  2,825.00                 -               -               - 2,825.00
      Advance for rendering of services                          -              -               -               -            -
      Other receivables                                          -              -               -            7.19       7.19
      Other payables                                             -              -               -           16.25     16.25
      Non-funded commitments                                 39.00              -               -               -     39.00
      Details of transactions with Axis Mutual Fund and Axis Infrastructure Fund-I, the funds floated by Axis Asset
      Management Company Ltd. and Axis Private Equity Ltd., the Bank’s wholly owned subsidiaries have not been disclosed
      since these entities do not qualify as Related Parties as defined under the Accounting Standard 18, Related Party
      Disclosure, as notified under the Companies (Accounting Standards) Rules, 2006 and as per RBI guidelines.
2.2.7 Leases
      Disclosure in respect of assets given on operating lease
      The Bank has not given any assets on operating lease.
      Disclosure in respect of assets taken on operating lease
      Operating lease comprises leasing of office premises/ATMs, staff quarters, electronic data capturing machines and IT
      equipment.
                                                                                                              (` in crores)
      Particulars                                                                    31 March, 2012         31 March, 2011
      Future lease rentals payable as at the end of the year:
      - Not later than one year                                                                465.15                435.35
      - Later than one year and not later than five years                                    1,616.67               1,222.13
      - Later than five years                                                                  477.56                671.10
      Total of minimum lease payments recognised in the Profit and Loss Account
      for the year                                                                             560.41                560.07
      Total of future minimum sub-lease payments expected to be received under
      non-cancellable subleases                                                                     0.30               1.21
      Sub-lease payments recognised in the Profit and Loss Account for the year                     1.08               0.91
      The Bank has sub-leased certain of its properties taken on lease.
      There are no provisions relating to contingent rent.
      The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
      There are no undue restrictions or onerous clauses in the agreements.



                                                                                                                        79
2.2.8 Other Fixed Assets (including furniture & fixtures)
       The movement in fixed assets capitalised as application software is given below:
                                                                                                                   (` in crores)
       Particulars                                                                        31 March, 2012       31 March, 2011
       At cost at the beginning of the year                                                        330.28               266.73
       Additions during the year                                                                     57.01               65.23
       Deductions during the year                                                                   (8.41)               (1.68)
       Accumulated depreciation as at 31 March                                                   (258.01)             (208.38)
       Closing balance as at 31 March                                                              120.87               121.90
       Depreciation charge for the year                                                             54.70                46.87
2.2.9 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:
                                                                                                                  (` in crores)
       As at                                                                              31 March, 2012       31 March, 2011
       Deferred tax assets on account of provisions for doubtful debts                             743.17               574.23
       Deferred tax assets on account of amortisation of HTM investments                           184.09               164.04
       Deferred tax assets on account of provision for employee benefits                            82.60                70.66
       Deferred tax liability on account of depreciation on fixed assets                           (23.06)              (32.67)
       Deferred tax assets on account of other contingencies                                          6.94               13.37
       Other deferred tax assets                                                                     33.71               27.22
       Net deferred tax asset                                                                    1,027.45               816.85
2.2.10 Employee Benefits
       Provident Fund
       The contribution to the employee’s provident fund amounted to `67.88 crores (previous year `41.83 crores) for the
       year.
       The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable to
       pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’
       Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the
       deficiency shall be made good by the Bank. Based on an actuarial valuation conducted by an independent actuary,
       there is no deficiency as at the Balance Sheet date. The principal assumptions used by the actuary are as under.

                                                                                                             31 March, 2012
      Discount rate for the term of the obligation                                                                      8.35%
      Average historic yield on the investment portfolio                                                                9.09%
      Discount rate for the remaining term to maturity of the investment portfolio                                      8.45%
      Expected investment return                                                                                        8.99%
      Guaranteed rate of return                                                                                         8.25%
       Superannuation
       The Bank contributed `13.89 crores (previous year `10.17 crores) to the employees’ superannuation plan for the year.




 80
Leave Encashment
The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the Bank
is given below:
                                                                                                          (` in crores)
                                                                                  31 March, 2012       31 March, 2011
Privileged leave                                                                           252.40               217.41
Sick leave                                                                                  20.26                18.56
Total actuarial liability                                                                  272.66               235.97
Assumptions
Discount rate                                                                          8.35% p.a.          8.05% p.a.
Salary escalation rate                                                                 6.00% p.a.          6.00% p.a.
Gratuity
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss Account and
funded status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
                                                                                                           (` in crores)
                                                                                  31 March, 2012       31 March, 2011
Current Service Cost                                                                         11.61                 9.03
Interest on Defined Benefit Obligation                                                        5.49                3.85
Expected Return on Plan Assets                                                              (4.83)               (3.34)
Net Actuarial Losses/(Gains) recognised in the year                                          23.74                0.67
Past Service Cost                                                                           (3.72)                 8.75
Total included in “Employee Benefit Expense”                                                32.29                18.96
Actual Return on Plan Assets                                                                  5.30                 2.57
Balance Sheet
Details of provision for gratuity
                                                                                                           (` in crores)
                                                                                  31 March, 2012       31 March, 2011
Fair Value of Plan Assets                                                                    97.91               63.43
Present Value of Funded Obligations                                                        (93.40)             (60.65)
Net Asset/(Liability)                                                                         4.51                 2.78
Amounts in Balance Sheet
Liabilities                                                                                       -                     -
Assets                                                                                        4.51                 2.78
Net Asset/(Liability)                                                                         4.51                 2.78




                                                                                                                   81
     Changes in the present value of the defined benefit obligation are as follows:
                                                                                                                    (` in crores)
                                                                                       31 March, 2012            31 March, 2011
     Change in Defined Benefit Obligation
     Opening Defined Benefit Obligation                                                           60.65                   42.56
     Current Service Cost                                                                         11.61                     9.03
     Interest Cost                                                                                 5.49                    3.85
     Actuarial Losses/(Gains)                                                                     24.22                   (0.11)
     Past service cost                                                                            (3.72)                    8.75
     Benefits Paid                                                                               (4.85)                   (3.43)
     Closing Defined Benefit Obligation                                                           93.40                   60.65
     Changes in the fair value of plan assets are as follows:
                                                                                                                    (` in crores)
                                                                                       31 March, 2012            31 March, 2011
     Change in the Fair Value of Assets
     Opening Fair Value of Plan Assets                                                            63.43                   43.97
     Expected Return on Plan Assets                                                                4.83                    3.34
     Actuarial Gains/(Losses)                                                                      0.48                   (0.78)
     Contributions by Employer                                                                    34.02                   20.33
     Benefits Paid                                                                               (4.85)                   (3.43)
     Closing Fair Value of Plan Assets                                                            97.91                   63.43

     Experience adjustments
                                                                                                                    (` in crores)
                                                    31 March,     31 March,       31 March,      31 March,          31 March,
                                                        2012          2011            2010           2009               2008
      Defined Benefit Obligations                        93.40          60.65          42.56          36.37              23.35
      Plan Assets                                        97.91          63.43          43.97          29.75               17.74
      Surplus/(Deficit)                                    4.51          2.78           1.41          (6.62)             (5.61)
      Experience Adjustments on Plan Liabilities         27.08           1.40           1.16              3.38            3.56
      Experience Adjustments on Plan Assets               0.48         (0.78)           0.46          (0.73)             (0.17)

     Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets

                                                                                      31 March, 2012         31 March, 2011
                                                                                                  %                      %
      Government securities                                                                      42.81                   40.48
      Bonds, debentures and other fixed income instruments                                       43.85                   34.66
      Money market instruments                                                                    9.89                   18.34
      Equity shares                                                                               2.31                    5.20
      Others                                                                                       1.14                    1.32



82
                                                                                          31 March, 2012       31 March, 2011
        Principal actuarial assumptions at the Balance Sheet date:
        Discount Rate                                                                          8.35% p.a.           8.05% p.a.
        Expected Rate of Return on Plan Assets                                                 7.50% p.a.           7.50% p.a.
        Salary Escalation Rate                                                                 6.00% p.a.           6.00% p.a.
        Employee Turnover
        - 21 to 30 (age in years)                                                                  20.41%              16.55%
        - 31 to 44 (age in years)                                                                 10.00%               10.00%
        - 45 to 59 (age in years)                                                                   1.00%               1.00%
       The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion
       and other relevant factors.
       The expected rate of return on plan assets is based on the average long-term rate of return expected on investments
       of the Fund during the estimated term of the obligations.
       As the contribution expected to be paid to the plan during the annual period beginning after the balance sheet date
       is based on various internal/external factors, a best estimate of the contribution is not determinable.
       The above information is as certified by the actuary and relied upon by the auditors.
2.2.11 Provisions and contingencies
       a)   Movement in provision for frauds included under other liabilities is set out below:
                                                                                                                    (` in crores)
                                                                                        31 March, 2012          31 March, 2011
       Opening balance at the beginning of the year                                                  4.99                   0.21
       Additions during the year                                                                   12.40                    4.78
       Reductions on account of payments during the year                                           (0.02)                        -
       Reductions on account of reversals during the year                                          (0.02)                        -
       Closing balance at the end of the year                                                       17.35                   4.99

       b)   Movement in provision for debit/credit card reward points is set out below:
                                                                                                                    (` in crores)
                                                                                        31 March, 2012          31 March, 2011
       Opening provision at the beginning of the year                                              25.01                   18.41
       Provision made during the year                                                              20.28                    8.25
       Reductions during the year                                                                  (2.01)                  (1.65)
       Closing provision at the end of the year                                                    43.28                   25.01

       c)   Movement in provision for other contingencies (including derivatives) is set out below:
                                                                                                                    (` in crores)
                                                                                        31 March, 2012          31 March, 2011
       Opening provision at the beginning of the year                                              36.44                         -
       Provision made during the year                                                                0.38                 36.44
       Reductions during the year                                                                 (36.01)                        -
       Closing provision at the end of the year                                                       0.81                36.44




                                                                                                                            83
2.2.12 Unclaimed Shares:
       Details of unclaimed shares as of 31 March, 2012 and 31 March, 2011 are as follows:

                                                                                         31 March, 2012        31 March, 2011
       Aggregate number of shareholders at the beginning of the year                                    38                  49
       Total outstanding shares in Unclaimed Suspense Account at the beginning of
       the year                                                                                     4,900               6,200
       Number of shareholders who approached to issuer for transfer of shares from
       Unclaimed Suspense Account during the year                                                        9                  11
       Number of shareholders to whom shares were transferred from Unclaimed
       Suspense Account during the year                                                                  9                  11
       Aggregate number of shareholders at the end of the year                                          29                  38
       Total outstanding shares in Unclaimed Suspense Account at the end of the year                3,600               4,900

2.2.13 Small and Micro Industries
       Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2 October,
       2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been
       no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays in such
       payments. The above is based on the information available with the Bank which has been relied upon by the auditors.
2.2.14 Description of contingent liabilities:
       a)   Claims against the Bank not acknowledged as debts
            These represent claims filed against the Bank in the normal course of business relating to various legal cases
            currently in progress. These also include demands raised by income tax and other statutory authorities and
            disputed by the Bank.
       b)   Liability on account of forward exchange and derivative contracts
            The Bank enters into foreign exchange contracts, currency options/swaps, interest rate/currency futures and
            forward rate agreements on its own account and for customers. Forward exchange contracts are commitments
            to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to
            exchange cash flows by way of interest/principal in two currencies, based on ruling spot rates. Interest rate swaps
            are commitments to exchange fixed and floating interest rate cash flows. Interest rate futures are standardised,
            exchange-traded contracts that represent a pledge to undertake a certain interest rate transaction at a specified
            price, on a specified future date. Forward rate agreements are agreements to pay or receive a certain sum based on
            a differential interest rate on a notional amount for an agreed period. A foreign currency option is an agreement
            between two parties in which one grants to the other the right to buy or sell a specified amount of currency at
            a specific price within a specified time period or at a specified future time. An Exchange Traded Currency Option
            contract is a standardized foreign exchange derivative contract, which gives the owner the right, but not the
            obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate
            on a specified date on the date of expiry. Currency Futures contract is a standardized, exchange-traded contract,
            to buy or sell a certain underlying currency at a certain date in the future, at a specified price.
       c)   Guarantees given on behalf of constituents
            As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their credit
            standing. Guarantees represent irrevocable assurances that the Bank will make payments in the event of the
            customer failing to fulfill its financial or performance obligations.
       d)   Acceptances, endorsements and other obligations
            These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the Bank’s
            customers that are accepted or endorsed by the Bank.




 84
       e)   Other items
            Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts
            remaining to be executed on capital account and commitments towards underwriting and investment in equity
            through bids under Initial Public Offering (IPO) of corporates as at the year end.
2.2.15 Previous year figures have been regrouped and reclassified, where necessary to conform to current year’s presentation.




                                                                                                 For Axis Bank Ltd.



                                                                                                 Adarsh Kishore
                                                                                                 Chairman


                             K. N. Prithviraj       V. R. Kaundinya          S. B. Mathur        Shikha Sharma
                             Director               Director                 Director            Managing Director & CEO


P. J. Oza                    Somnath Sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




                                                                                                                        85
AUDITORS’ CERTIFICATE
To The MeMbers of
Axis bAnk LiMiTed

We have examined the compliance of conditions of corporate governance by Axis bAnk LiMiTed (“the Bank”) for the
year ended 31st March, 2012, as stipulated in clause 49 of the Listing Agreement of the said Bank with the stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was
limited to procedures and implementation thereof, adopted by the Bank for ensuring the compliance of the conditions of
the corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Bank.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Bank
has complied with the conditions of corporate governance as stipulated in the abovementioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Bank nor the efficiency or
effectiveness with which the Management has conducted the affairs of the Bank.

For deLoiTTe hAskins & seLLs
Chartered Accountants
(Registration No. 117365W)


Z. f. billimoria
Partner
(Membership No.42791)


Place : Mumbai
Date : 27th April, 2012




 86
CORPORATE GOVERNANCE
(forming Part of the directors’ report for the year ended 31st March, 2012)
1.   Philosophy on Code of Governance
     The Bank’s policy on Corporate Governance has been:
     I.    To enhance the long term interest of its shareholders, provide good management, adopt prudent risk management
           techniques and comply with the required standards of capital adequacy, thereby safeguarding the interest of its
           other stakeholders such as depositors, creditors, customers, suppliers and employees.
     II.   To identify and recognise the Board of Directors and the Management of the Bank as the principal instruments
           through which good corporate governance principles are articulated and implemented. To also identify and
           recognise accountability, transparency and equality of treatment for all stakeholders, as central tenets of good
           corporate governance.
2.   board of directors
     The composition of the Board of Directors of the Bank is governed by the Companies Act, 1956, the Banking Regulation
     Act, 1949 and Clause 49 of the Listing Agreement. The Bank’s Board comprises a combination of executive and non-
     executive Directors. The Board presently consists of 11 Directors and its mix provides a combination of professionalism,
     knowledge and experience required in the banking business. There are 6 independent Directors constituting more than
     one-half of the Board’s membership with Shri S. B. Mathur designated as the Lead Independent Director. The Board is
     responsible for the management of the Bank’s business. The functions, responsibilities, role and accountability of the
     Board are well defined. In addition to monitoring corporate performance, the Board also carries out functions such as
     taking care of all the statutory agenda, approving the Business Plan, reviewing and approving the annual budgets and
     borrowing limits and fixing exposure limits. It ensures that the Bank keeps shareholders informed about plans, strategies
     and performance. The detailed reports of the Bank’s performance are periodically placed before the Board.
     The composition of the Bank’s Board includes the representatives of the Administrator of the Specified Undertaking
     of the Unit Trust of India (SUUTI) and the Life Insurance Corporation of India, the Bank’s promoters. The following
     members constitute the Board:

     Adarsh Kishore                  Chairman
                                     Promoter – Nominee of SUUTI
     Shikha Sharma                   Managing Director and Chief Executive Officer
     Rama Bijapurkar                 Independent
     K. N. Prithviraj                Promoter – Nominee of SUUTI
     V. R. Kaundinya                 Independent
     S. B. Mathur                    Independent
     Prasad R. Menon                 Independent
     R.N. Bhattacharyya              Promoter – Nominee of SUUTI
     Samir K. Barua                  Independent
     A. K. Dasgupta                  Promoter – Nominee of the Life Insurance Corporation of India
     Som Mittal                      Independent
     Dr. Adarsh Kishore, Smt. Shikha Sharma, Shri S. K. Chakrabarti (who retired on 30th September, 2011), Shri M. V. Subbiah
     (who resigned with effect from 26th April, 2012), Shri R. B. L. Vaish (who resigned with effect from 5th September,
     2011), Smt. Rama Bijapurkar, Shri J. R. Varma (who retired on 17th June, 2011), Shri S. B. Mathur (Chairman of Audit
     Committee), Shri V. R. Kaundinya, Shri Prasad R. Menon and Shri R. N. Bhattacharyya attended the last Annual General
     Meeting held on 17th June, 2011 at Ahmedabad.
     In all, 10 meetings of the Board were held during the year on 22nd April, 2011, 17th June, 2011, 21st July, 2011, 22nd July,
     2011, 5th September, 2011, 16th September, 2011, 21st October, 2011, 22nd October, 2011, 20th January, 2012 and 13th
     February, 2012.



                                                                                                                            87
     Dr. Adarsh Kishore, Smt. Shikha Sharma, Smt. Rama Bijapurkar and Shri R. N. Bhattacharyya attended all the ten
     meetings. Shri K. N. Prithviraj and Shri S. B. Mathur attended nine meetings. Shri V. R. Kaundinya and Shri Prasad
     R. Menon attended seven meetings. Shri S. K. Chakrabarti attended all the six meetings for which he was eligible.
     Shri M. V. Subbiah attended five meetings. Shri R. B. L. Vaish attended all the four meetings for which he was eligible.
     Prof. Samir K. Barua and Shri A. K. Dasgupta attended four meetings out of six meetings for which they were eligible.
     Dr. R. H. Patil (who expired on 12th April, 2012) could attend three meetings. Shri. J. R. Varma attended one meeting
     for which he was eligible. Shri S. K. Roongta and Shri Som Mittal attended one meeting out of two meetings for which
     they were eligible.
     The Directors of the Bank also hold positions as directors, trustees, members and partners in other well-known and
     reputed companies, trusts, firms etc. as per the details given below:

     i.     AdArsh kishore

     sr. no. name of the Company/institution                             nature of interest
     1.       AEGON Religare Life Insurance Company Limited              Director/Chairman - Audit Committee/Chairman
                                                                         - Ethics & Compliance Committee/Member -
                                                                         Nomination & Remuneration Committee/Chairman
                                                                         - Policy holders Protection Committee
     2.       Havells India Limited                                      Director
     3.       Advisory Board of Chartered Finance Management Member
              Limited
     4.       CFM International Limited                                  Director

     ii.    shikhA shArMA

     sr. no. name of the Company/institution                             nature of interest
     1.       Axis Asset Management Company Limited                      Chairperson
     2.       Axis U.K. Limited                                          Chairperson
     3.       Axis Private Equity Limited                                Director

     iii.   rAMA biJAPUrkAr

     sr. no. name of the Company/institution                             nature of interest
     1.       CRISIL Risk & Infrastructure Solutions Limited             Chairperson
     2.       CRISIL Limited                                             Director/Member – Compensation Committee/
                                                                         Member – Allotment Committee
     3.       Mahindra Holidays & Resorts India Limited                  Director/Chairperson – Remuneration Committee/
                                                                         Member – Audit Committee
     4.       Mahindra & Mahindra Financial Services Limited             Director/Member – Audit Committee/Member –
                                                                         Risk Management Committee
     5.       ICICI Prudential Life Insurance Company Limited            Director/Chairperson – Board Nomination &
                                                                         Compensation Committee/Member – Board Risk
                                                                         Management Committee
     6.       Ambit Holdings Private Limited                             Director
     7.       Janalakshmi Financial Services Pvt. Limited                Director
     8.       Vishwas (Vision for Health Welfare & Special Needs)        Director
              (Section 25 company)
     9.       Banking Codes and Standards Board of India (BCSBI)         Member – Governing Council




88
iv.   k. n. PriThVirAJ

sr. no. name of the Company/institution                         nature of interest
1.        UTI Infrastructure Technology & Services Limited      Chairman
2.        Surana Industries Limited                             Director/Member – Audit Committee/Member –
                                                                Remuneration & Nomination Committee
3.        Surana Power Limited                                  Director
4.        Dwarikeshwar Sugars Industries Limited                Director/Chairman – Audit Committee
5.        Falcon Tyres Limited                                  Director/Member – Audit Committee
6.        Daiwa Trustees Private Limited                        Director/Member – Audit Committee
7.        PNB Investment Services Limited                       Director
8.        Brickwork Ratings (India) Pvt. Limited                Director/Member – Audit Committee
9.        Specified Undertaking of the Unit Trust of India      Administrator & Member of Board of Advisors
10.       Oversight Committee on Sale of Assets of IIBI         Member
          (Government of India)
11.       Eurasia Investment Advisors Pvt. Limited              Director

v.    V. r. kAUndinYA

sr. no.   name of the Company/institution                       nature of interest
1.        Advanta India Limited                                 Managing Director & CEO
2.        Advanta Seeds Limited                                 Director
3.        Unicorn Seeds Private Limited                         Director
4.        Warrantify Oy                                         Director

vi.   s. b. MAThUr

sr. no. name of the Company/institution                         nature of interest
1.      Orbis Financial Corporation Limited                     Chairman/Member – Audit Committee
2.      Cholamandalam MS General Insurance Company              Chairman/Member – Audit Committee
        Limited
3.      DCM Sriram Industries Limited                           Director/Member – Audit Committee
4.      Havells India Limited                                   Director/Chairman – Audit Committee
5.      HDIL Limited                                            Director
6.      HOEC Limited                                            Director/Member – Audit Committee
7.      Infrastructure Leasing and Financial Services Limited   Director
8.      ITC Limited                                             Director/Chairman – Audit Committee
9.      National Collateral Management Services Co. Limited     Director
10.     National Stock Exchange of India Limited                Director
11.     Ultratech Cement Limited                                Director
12.     Janalakshmi Financial Services Private Limited          Director
13.     Munich Re India Services Private Limited                Director
14.     J.M. Financial Asset Reconstruction Company Private     Director
        Limited
15.     General Insurance Corporation of India                  Director/Chairman – Audit Committee
16.     National Investment Fund                                Advisor
17.     IDFC Trustee Company Limited                            Trustee
18.     AIG Trustee Company Private Limited                     Trustee




                                                                                                              89
     vii.   PrAsAd r. Menon

     sr. no. name of the Company/institution                   nature of interest
     1.       NELCO Limited                                    Chairman/Member – Nominations Committee
     2.       Tata Consulting Engineers Limited                Chairman/Member – Remuneration & Nomination/
                                                               Member – Executive Committee of the Board
     3.       Tata Chemicals Limited                           Director/ Member – Executive Committee of the
                                                               Board
     4.       Tata Projects Limited                            Director/Member – Remuneration Committee
     5.       Tata Industries Limited                          Director/Member – Audit Committee
     6.       Tata BP Solar India Limited                      Director/Member – Audit Committee
     7.       The Sanmar Group                                 Director
     8.       SKF India Limited                                Director/Member – Audit Committee

     viii. r. n. bhATTAChArYYA - niL

     ix.    sAMir k. bArUA

     sr. no. name of the Company/institution                   nature of interest
     1.       Bharat Petroleum Corporation Limited             Director/Chairman –Remuneration Committee/
                                                               Chairman –Project Evaluation Committee/Member
                                                               – Audit Committee/Member – Standing Committee
                                                               of the Board of Release of Flats
     2.       STCI Finance Limited                             Director/Chairman – HR Committee/Member –
                                                               Audit Committee
     3.       Coal India Limited                               Director/Chairman – HRM Committee/Chairman
                                                               –Remuneration Committee/Member – Audit
                                                               Committee
     4.       Torrent Power Limited                            Director/Member – Audit Committee
     5.       IOT Infrastructure and Energy Services Limited   Director/Member – Audit Committee
     6.       Prasar Bharati                                   Part Time Member/Member – Strategy and Vision
                                                               Committee/Member – Empowered Committee on
                                                               Finance
     7.       Oil and Natural Gas Corporation Limited          Non-official Part- time Director/Chairman – HRM
                                                               Committee/Member – Audit & Ethics Committee/
                                                               Member – Project Appraisal Committee/Member
                                                               – Shareholders’/Investors’ Grievance Committee/
                                                               Member – Health, Safety & Environment
                                                               Committee/Member – Financial Management
                                                               Committee

     x.     A. k. dAsGUPTA

     sr. no. name of the Company/institution                   nature of interest
     1.       ABB Limited                                      Director/Member – Audit Committee
     2.       Grasim Industries Limited                        Director




90
xi.   soM MiTTAL

sr. no. name of the Company/institution                          nature of interest
1.       National Skill Development Corporation                  Board member
2.       National Institute for Smart Government                 Director
3.       National Research Development Corporation               Non-official Part time Director
4.       Media Lab Asia                                          Director
5.       Data Security Council of India                          Director
6.       NASSCOM Foundation                                      Trustee

The business of the Board is also conducted through the following Committees constituted by the Board to deal with
specific matters and delegated powers for different functional areas:

a)    Committee of directors

      Shikha Sharma
      S. B. Mathur
      K. N. Prithviraj
      Prasad R. Menon

b)    Audit Committee
      S. B. Mathur - Chairman
      V. R. Kaundinya
      K. N. Prithviraj
      Samir K. Barua

c)    risk Management Committee
      Adarsh Kishore - Chairman
      Shikha Sharma
      K. N. Prithviraj
      Samir K. Barua

d)    shareholders/investors Grievance Committee
      Adarsh Kishore - Chairman
      S. B. Mathur
      R. N. Bhattacharyya

e)    hr and remuneration Committee
      Rama Bijapurkar - Chairperson
      K. N. Prithviraj
      Prasad R. Menon

f)    nomination Committee
      S. B. Mathur – Chairman
      V. R. Kaundinya
      Rama Bijapurkar




                                                                                                             91
     g)   special Committee of the board of directors for Monitoring of Large Value frauds
          Shikha Sharma - Chairperson
          V. R. Kaundinya
          R. N. Bhattacharyya

     h)   Customer service Committee
          Adarsh Kishore - Chairman
          Shikha Sharma
          Samir K. Barua

     i)   Committee of Whole-Time directors
          Shikha Sharma - Chairperson
          Whole-Time Director (Presently vacant)

     j)   Acquisitions, divestments and Mergers Committee
          Shikha Sharma
          Rama Bijapurkar
          K. N. Prithviraj
          V. R. Kaundinya
          S. B. Mathur
          Prasad R. Menon

     k)   iT strategy Committee
          Som Mittal - Chairman
          Shikha Sharma
          Prasad R. Menon
     The functions of the Committees are discussed below:

     a)   Committee of directors
          The Committee of Directors (COD) functions with the following main objectives:
          i.      To provide approvals for loans above certain stipulated limits, discuss strategic issues in relation to credit
                  policy and deliberate on the quality of the credit portfolio.
          ii.     To monitor the exposures (both credit and investment) of the Bank.
          iii.    To sanction expenditures above certain stipulated limits.
          iv.     To approve expansion of the location of the Bank’s Network of offices, branches, extension counters, ATMs
                  and Currency Chests.
          v.      To review investment strategy and approve investment related proposals above certain limits.
          vi.     To approve proposals relating to the Bank’s operations covering all departments and business segments.
          vii.    To ensure compliance with the statutory and regulatory framework, etc.; and
          viii.   To discuss issues relating to day to day affairs and problems and to take such steps as may be deemed
                  necessary for the smooth functioning of the Bank. All routine matters other than the strategic matters and
                  review of policies other than strategic policies like Credit Policy, Investment Policy and other policies which
                  the Committee of Directors may consider necessary or Reserve Bank of India (RBI) may specifically require to
                  be reviewed by the Board.




92
     Meetings and Attendance during the year:

     11 meetings of the Committee of Directors were held during the year on 25th April, 2011, 31st May, 2011, 24th
     June, 2011, 27th July, 2011, 19th August, 2011, 15th September, 2011, 8th November, 2011, 19th December, 2011, 30th
     January, 2012, 27th February, 2012 and 20th March, 2012. Smt. Shikha Sharma attended all the eleven meetings.
     Shri S. B. Mathur attended ten meetings. Shri K. N. Prithviraj attended nine meetings. Dr. R. H. Patil and Shri Prasad
     R. Menon attended seven meetings. Shri S. K. Chakrabarti attended all the six meetings for which he was eligible.
     Shri V. R. Kaundinya attended one meeting out of two meetings for which he was eligible.

b)   Audit Committee
     The Audit Committee of the Board of Directors functions with the following main objectives:
     i.      To provide direction and to oversee the operation of the audit function.
     ii.     To review the internal audit system with special emphasis on its quality and effectiveness.
     iii.    To review internal and concurrent audit reports of large branches with a focus on all major areas of
             housekeeping, particularly inter branch adjustment accounts, arrears in the balancing of the books and un-
             reconciled entries in inter-bank and Nostro accounts and frauds.
     iv.     To discuss matters related to frauds.
     v.      To discuss and follow up for audit issues related to Long Form Audit Report.
     vi.     To discuss and follow up for issues related to RBI Inspection Report(s).
     vii.    To review the system of appointment and remuneration of concurrent auditors and external auditors.
     viii.   To oversee the Bank’s financial reporting process and the disclosure of its financial information to ensure that
             the financial statements are correct, sufficient and credible.
     ix.     To recommend to the Board, the appointment, re-appointment, and if required, the replacement or removal
             of the Statutory Auditor and the fixation of their audit fees.
     x.      To approve payments to Statutory Auditors for any other services rendered by them.
     xi.     To review, with the management, the annual financial statements before submission to the Board for its
             approval with particular reference to:
             a.    Matters required to be included in the Director’s Responsibility Statement in the Board’s report in
                   terms of clause (2AA) of section 217 of the Companies Act, 1956.
             b.    Changes, if any, in accounting policies & practices and reasons for the same.
             c.    Major accounting entries involving estimates based on the exercise of judgment by the management.
             d.    Significant adjustments made in the financial statements arising out of audit findings.
             e.    Compliance with listing and other legal requirements relating to financial statements.
             f.    Disclosure of any related party transactions.
             g.    Qualifications in the draft audit report.
     xii.    To review, with the management, the quarterly financial statements before submission to the Board for its
             approval.
     xiii.   To review, with the management, the statement of uses/application of funds raised through an issue (public
             issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those
             stated in the offer document/prospectus/notice and the report submitted by the agency monitoring the
             utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board for
             taking steps in the matter.
     xiv.    To review, with the management, performance of statutory and internal auditors, and adequacy of the
             internal control systems.
     xv.     To obtain and review quarterly/half yearly reports of the Compliance Officer appointed in the Bank in terms
             of RBI instructions (RBI Circular dated 26.9.1995).



                                                                                                                        93
          xvi.   To review the adequacy of internal audit function, if any, including the structure of the internal audit
                 department, staffing, seniority of the official heading the department, reporting structure, coverage and
                 frequency of internal audit.
          xvii. To discuss with internal auditors any significant audit findings and follow up thereon.
          xviii. To review the findings of any internal investigations by the internal auditors into matters where there is
                 suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
                 matter to the Board.
          xix.   To discuss with Statutory Auditors, before the commencement of audit, the nature and scope of audit as
                 also conduct post-audit discussion to ascertain any area of concern.
          xx.    To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
                 shareholders (in case of non-payment of declared dividends) and creditors.
          xxi.   To review functioning of the Whistleblower Mechanism.
          xxii. To approve the appointment of the Chief Financial Officer before finalisation of the same by the management.
                The Audit Committee, while approving the appointment, shall assess the qualifications, experience &
                background etc. of the candidate (Amended Clause 49 – SEBI circular dated 5.4.2010).
          xxiii. Carrying out any other function as is mentioned in terms of reference of the Audit Committee.

          Meetings and Attendance during the year:

          12 meetings of the Audit Committee were held during the year on 21st April, 2011, 31st May, 2011, 24th June, 2011,
          21st July, 2011, 6th September, 2011, 10th October, 2011, 22nd October, 2011, 1st December, 2011, 19th December,
          2011, 19th January, 2012, 13th February, 2012 and 19th March, 2012. Shri S. B. Mathur attended all the twelve
          meetings. Shri V. R. Kaundinya attended six meetings out of ten meetings for which he was eligible. Shri K. N.
          Prithviraj attended all the five meetings for which he was eligible. Shri R. B. L. Vaish attended all the four meetings
          for which he was eligible. Prof. Samir K. Barua attended four meetings out of five meetings for which he was
          eligible. Dr. R. H. Patil and Shri S. K. Roongta attended one meeting out of two meetings for which they were
          eligible.

     c)   risk Management Committee
          The Risk Management Committee of the Board of Directors functions with the following main objectives:
          i.     To perform the role of Risk Management in pursuance of the Risk Management Guidelines issued periodically
                 by RBI and Board.
          ii.    To oversee and advise to the Board on:
                 a.    Defining risk appetite, tolerance thereof and review the same, as appropriate.
                 b.    Systems of risk management framework, internal control and compliance to identify, measure,
                       aggregate, control and report key risks.
                 c.    Alignment of business strategy with the Board’s risk appetite; and
                 d.    Maintenance and development of a supportive culture, in relation to the management of risk,
                       appropriately embedded through procedures, training and leadership actions so that all employees
                       are alert to the wider impact on the whole organisation of their actions and decisions.
          iii.   To advise the Board on all high level risk matters.
          iv.    To require regular risk management reports from management which enable the Committee to assess the
                 risks involved in the Bank’s business and how they are controlled and monitored by management, and give
                 clear focus to current and forward-looking aspects of risk exposure.
          v.     To review the effectiveness of the Bank’s internal control and risk management framework, in relation to its
                 core strategic objectives, and to seek such assurance as may be appropriate.
          vi.    To review the Asset Liability Management (ALM) of the Bank on a regular basis.




94
     vii.    To consider any major regulatory issues that may have bearing on the risks and risk appetite of the Bank.
     viii.   To provide to the Board with such additional assurance as it may require regarding the quality of risk
             information submitted to it.
     ix.     To decide the policy and strategy for integrated risk management containing various risk exposures of the
             Bank including the credit, market, liquidity, operational and reputation risk; and
     x.      To review risk return profile of the Bank, capital adequacy based on the risk profile of the Bank’s balance
             sheet, Basel-II implementation, assessment of Pillar II risk under Internal Capital Adequacy Assessment
             Process (ICAAP), business continuity plan and disaster recovery plan, key risk indicators and significant risk
             exposures.
     Meetings and Attendance during the year:

     4 meetings of the Risk Management Committee were held during the year on 22nd April, 2011, 21st July, 2011,
     5th December, 2011 and 13th February, 2012. Dr. Adarsh Kishore and Smt. Shikha Sharma attended all the four
     meetings. Shri K. N. Prithviraj attended all the three meetings for which he was eligible. Shri S. K. Chakrabarti and
     Prof. Samir K. Barua attended two meetings for which they were eligible. Shri J. R. Varma and Shri R. B. L. Vaish
     attended one meeting for which they were eligible.
d)   shareholders/investors Grievance Committee
     The primary objective of the Shareholders/Investors Grievance Committee is to look into redressal of shareholders’
     and investors’ grievances relating to non-receipt of dividend, refund orders, shares sent for transfer, non-receipt of
     Annual Report and other similar grievances.

     Meetings and Attendance during the year:

     4 meetings of the Shareholders/Investors Grievance Committee were held during the year on 21st April, 2011,
     20th July, 2011, 5th December, 2011 and 19th January, 2012. Dr. Adarsh Kishore attended all the four meetings.
     Shri S. B. Mathur attended three meetings. Shri R. N. Bhattacharyya attended all the three meetings for which he
     was eligible. Shri K. N. Prithviraj and Shri R. B. L. Vaish attended one meeting for which they were eligible.
     The details of the status of the references/complaints received for the year are given in the following statement:
                       status of the references/Complaints from 1st April, 2011 to 31st March, 2012

     sr. no. nature of reference/Complaints                               received       disposed off            Pending
     1.         Change of Address                                                361                361                    -
     2.         Bank Mandates                                                     44                 44                    -
     3.         ECS                                                              315                315                    -
     4.         Nomination                                                       135                135                    -
     5.         Non-receipt of Share Certificates                                 57                 57                    -
     6.         Correction of names                                                8                  8                    -
     7.         Stock Exchange queries                                             1                  1                    -
     8.         NSDL/CDSL Queries                                                   -                  -                   -
     9.         SEBI                                                               4                  4                    -
     10.        Receipt of dividend warrant for revalidation                     302                302                    -
     11.        Non-receipt of Dividend                                          827                827                    -
     12.        Non-receipt of Annual Report                                      31                 31                    -
     13.        Transfers                                                        421                421                    -
     Shri P. J. Oza, Company Secretary, is the Compliance Officer for SEBI/Stock Exchange related issues.




                                                                                                                      95
     e)   hr and remuneration Committee

          The HR and Remuneration Committee of the Board of Directors functions with the following main objectives:
          i.      To review and recommend to the Board for approval, the overall remuneration philosophy and policy of
                  the Bank, including the level and structure of fixed pay, variable pay, perquisites, bonus pool, stock-based
                  compensation to employees of the Bank, and any other form of compensation as may be included from time
                  to time. This was to be undertaken keeping in mind the strategic objectives, market environment and the
                  regulatory framework as may exist from time to time.
          ii.     To review and recommend to the Board for approval, an increase in manpower cost budget of the Bank as
                  a whole, at an aggregate level, for the next year.
          iii.    To review and recommend to the Board for approval, the talent management and succession policy and
                  process in the Bank for ensuring business continuity, especially at the level of Managing Director and Chief
                  Executive Officer (MD & CEO), the other Whole-time Directors, senior managers one level below the Board
                  position and other key roles.
          iv.     To review organisation health through feedback from employee surveys conducted on a regular basis.
          v.      To review the Code of Conduct and HR strategy, policy and performance appraisal process within the Bank,
                  as well as any fundamental changes in organisation structure which could have wide ranging or high risk
                  implications.
          vi.     To review and recommend to the Board for approval the creation of new positions at the level of Executive
                  Director and above.
          vii.    To review appointments, promotions and exits of senior managers one level below the Board position.
          viii.   To set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, the other Whole-
                  time Directors and Executive Directors for the financial year and over the medium to long term.
          ix.     To review the performance of the MD & CEO, other Whole-time Directors and Executive Directors at the end
                  of each year.
          x.      To recommend to the Board the remuneration package for the MD & CEO, the other Whole-time Directors
                  and senior managers one level below the Board.
          xi.     To recommend to the Board the compensation payable to the Chairman of the Bank.
          Meetings and Attendance during the year:
          8 meetings of HR and Remuneration Committee were held during the year on 16th April, 2011, 30th May, 2011,
          7th June, 2011, 18th August, 2011, 1st December, 2011, 28th December, 2011, 4th February, 2012 and 7th February,
          2012. Smt. Rama Bijapurkar, Shri K. N. Prithviraj and Shri Prasad R. Menon attended all the eight meetings.
          Dr. R. H. Patil attended six meetings. Shri S. K. Roongta attended one meeting out of three meetings for which
          he was eligible.
          remuneration Policy
          The Bank believes that to attract the right talent, the Remuneration Policy should be structured in line with other
          peer group banks, and is sensitive to compensation packages in this part of the financial market. Compensation
          is structured in terms of fixed pay, variable pay and employee stock options, with the last two being strongly
          contingent on employee performance. The Remuneration Policy for the Chairman, MD & CEO and other Whole-
          time Directors is similarly structured and approved by the Board of Directors, the shareholders and the RBI from
          time to time.
          remuneration of directors
          i.      Dr. Adarsh Kishore has been appointed as Chairman of the Bank for a period of three years w.e.f. 8th March,
                  2010. The details of remuneration of Dr. Adarsh Kishore during the year under review are:
                  Salary of `1,25,000 per month. The Bank has received approval of RBI, shareholders and of the Central
                  Government under the provisions of Section 309(4) of the Companies Act, 1956 for payment of salary to
                  Dr. Adarsh Kishore.




96
       Expenses for maintenance of office `75,000 per month. Approval of Board and Reserve Bank of
       India has been received to increase the expenses for maintenance of office to `1,00,000 per month
       w.e.f. 1st April, 2011 and approval of shareholders is being requested in the ensuing Annual General Meeting.
       An application has been made to the Central Government for its approval in the matter which is expected
       to be received after the approval of shareholders is obtained.
ii.    Smt. Shikha Sharma was appointed as the Managing Director and Chief Executive Officer of the Bank
       for a period of three years w.e.f. 1st June, 2009. The Board at its meeting held on 13th February, 2012 has
       re-appointed her for a further period of three years with effect from 1st June, 2012 till 31st May, 2015.
       The details of remuneration paid to Smt. Shikha Sharma during the year under review are given below in
       sub-para v.
       Smt. Shikha Sharma was granted 1,00,000, 1,75,000 and 2,00,000 options under the Employee Stock
       Option Plan Grant IX B (13th July, 2009), Grant X (20th April, 2010) and Grant XI (22nd April, 2011) respectively.
       From these tranches, 97,500 options were vested up to 31st March, 2012 and 15,000 options have been
       exercised by Smt. Shikha Sharma till 31st March, 2012.
iii.   Shri S. K. Chakrabarti was appointed as Deputy Managing Director of the Bank with effect from
       27th September, 2010. The term of Shri S. K. Chakrabarti was up to 30th September, 2011, the last day
       of the month in which he attained the age of superannuation. The approval of the shareholders to the
       appointment of Shri S. K. Chakrabarti as the Deputy Managing Director and payment of remuneration was
       obtained in the Annual General Meeting held on 17th June, 2011.
       The details of remuneration paid to Shri S. K. Chakrabarti during the year under review are given below in
       sub-para v.
       Shri S. K. Chakrabarti was granted 3,55,380 options in total under various tranches under the Employee
       Stock Option Plan (out of which 85,000 options were granted after he was appointed as Deputy Managing
       Director). From these tranches, 1,96,204 options were vested out of which 1,59,046 options were exercised
       up to 30th September, 2011 and 37,158 options were unexercised. 1,59,176 options were unvested as on 30th
       September, 2011.
iv.    In accordance with the present regulations of RBI, the Bank does not grant ESOPs to Non-Executive Directors.
v.     The details of remuneration paid to the Whole-time Directors during 2011-12 are as under:
                                                                                                                   (In `)
                                                         smt. shikha sharma                   shri s. k. Chakrabarti
       For the Period                                    1.4.2011 to 31.3.2012                 1.4.2011 to 30.9.2011
       Salary                                                      1,52,06,666                             40,99,998
       Leave Fare Concession facility                                 8,80,000                              4,00,002
       House Rent Allowance                                          58,40,000                                      -
       Variable pay                                                  33,85,416                             22,00,929
       Other Allowance                                                         -                            7,50,000
       Provident Fund                                 @ 12% of pay with equal               @ 12% of pay with equal
                                                 contribution by the Bank or as        contribution by the Bank or as
                                               decided by the Board of Trustees      decided by the Board of Trustees
                                                              from time to time                     from time to time
       Gratuity                                    One month’s salary for each                           1,34,03,840
                                               completed year of service or part
                                                                        thereof.
       Superannuation                                    10% of basic pay p.a.                                 4,10,000
       Leave Encashment                                                        -                              49,76,109




                                                                                                                    97
                 Perquisites (evaluated as per Income Tax Rules, wherever applicable, or otherwise at actual cost to the Bank)
                 such as the benefit of the Bank’s furnished accommodation, electricity, water and furnishings, club fees,
                 personal accident insurance, loans, use of car and telephone at residence, medical reimbursement, travelling
                 and halting allowances, newspapers and periodicals, and others were provided in accordance with the Rules
                 of the Bank.
          vi.    All Directors of the Bank, except for Smt. Shikha Sharma and Shri S. K. Chakrabarti, were paid sitting fees of
                 `20,000 for every meeting of the Board and also for every meeting of the Committees attended by them.
                 Reimbursement of expenses, if any, for travel to and from the places of their residence to the venue of the
                 meeting, lodging and boarding when attending the meeting, being on actual basis, is made directly by the
                 Bank to the service providers. During the year, sitting fees of `51,20,000 was paid to the Directors of the
                 Bank.
                 sitting fees
                 The details of sitting fees paid to the Directors during 2011-12 are as follows:
                 sr. no.   name of director                                                sitting fees (`)
                 1.        Adarsh Kishore                                                         4,40,000
                 2.        J. R. Varma                                                              60,000
                 3.        R. H. Patil                                                            3,80,000
                 4.        Rama Bijapurkar                                                        5,20,000
                 5.        R. B. L. Vaish                                                         3,00,000
                 6.        M. V. Subbiah                                                          1,00,000
                 7.        K. N. Prithviraj                                                       7,60,000
                 8.        V. R. Kaundinya                                                        4,60,000
                 9.        S. B. Mathur                                                           8,80,000
                 10.       S. K. Roongta                                                            60,000
                 11.       Prasad R. Menon                                                        5,00,000
                 12.       R. N. Bhattacharyya                                                    3,00,000
                 13.       Samir K. Barua                                                         2,40,000
                 14.       A. K. Dasgupta                                                           80,000
                 15.       Som Mittal                                                               40,000
                           ToTAL                                                                 51,20,000
                 The details of shares of the Bank, held by the non-whole time Directors as on 31st March, 2012 are as
                 follows:
                 name of director                                      no. of shares held
                 S. B. Mathur                                          200 equity shares
     f)   nomination Committee
          The Nomination Committee of the Board of Directors functions with the following main objectives:
          i.     To undertake a process of due diligence to determine the suitability of any person for appointment/
                 continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record,
                 integrity and other ‘fit and proper’ criteria.
          ii.    To examine the vacancies that will come up at the Board on account of retirement or otherwise.
          iii.   To evaluate the skills that exist, and those that are absent but needed at the Board level, and search for
                 appropriate candidates who have the profile to provide such skill sets.
          iv.    To create a recommendatory list of Directors for deliberation and decision-making at the Board-level.
          v.     To review the composition of Committees of the Board, and identify and recommend to the Board, the
                 Directors who can best serve as members of each Board Committee.




98
     Meetings and Attendance during the year:
     7 meetings of Nomination Committee were held during the year on 21st April, 2011, 10th May, 2011, 22nd July,
     2011, 11th August, 2011, 5th September, 2011, 10th October, 2011 and 13th February, 2012. Shri S. B. Mathur
     attended all the seven meetings. Smt. Rama Bijapurkar attended six meetings. Shri V. R. Kaundinya attended five
     meetings. Shri R. B. L. Vaish attended all the three meetings for which he was eligible.

g)   special Committee of the board of directors for Monitoring of Large Value frauds
     The major functions of the Special Committee are to monitor and review all the frauds of `1 crore and above, so
     as to:-
     i.      Identify the systemic lacunae, if any, which facilitated perpetration of the fraud and put in place measures to
             plug the same.
     ii.     Identify the reasons for delay, if any, in detection and reporting to top management of the Bank and RBI.
     iii.    Monitor progress of CBI/Police investigation and recovery position.
     iv.     Ensure that staff accountability is examined at all levels in all the cases of frauds and staff related action, if
             required, is completed quickly without loss of time.
     v.      Review the efficacy of the remedial action taken to prevent recurrence of frauds, such as, strengthening of
             internal controls.
     vi.     Put in place other measures as may be considered relevant to strengthen preventive measures against frauds.
     Meetings and Attendance during the year:
     2 meetings of Special Committee of the Board of Directors for Monitoring of Large Value Frauds were held
     during the year on 6th September, 2011 and 7th February, 2012. Smt. Shikha Sharma, Shri V. R. Kaundinya and
     Shri R. N. Bhattacharyya attended both the meetings. Shri S. K. Chakrabarti attended one meeting for which he
     was eligible.
h)   Customer service Committee
     The Customer Service Committee of the Board of Directors functions with the following main objectives:
     i.      Overseeing the functioning of the Bank’s internal committee set-up for customer service.
     ii.     To review the level of customer service in the Bank including customer complaints and the nature of their
             resolution.
     iii.    Provide guidance in improving the customer service level.
     iv.     Review any award by the Banking Ombudsman to any customer on a complaint filed with the Ombudsman.
     v.      To ensure that the Bank provides and continues to provide, best-in-class service across all its category of
             customers which will help the Bank in protecting and growing its brand equity.
     vi.     The Committee could address the formulation of a Comprehensive Deposit Policy, incorporating the issues
             such as the treatment of death of a depositor for operations of his/her account, the product approval
             process, the annual survey of depositor satisfaction and the triennial audit of such services.
     vii.    To examine any other issues having a bearing on the quality of customer service rendered.
     viii.   To ensure implementation of directives received from RBI with respect to rendering services to customers of
             the Bank.

     Meetings and Attendance during the year:

     4 meetings of the Customer Service Committee were held during the year on 16th June, 2011, 20th July, 2011,
     5th December, 2011 and 14th March, 2012. Dr. Adarsh Kishore and Smt. Shikha Sharma attended all the four
     meetings. Shri R. B. L. Vaish, Shri S. K. Chakrabarti and Prof. Samir K. Barua attended two meetings for which they
     were eligible. Shri. J. R. Varma attended one meeting for which he was eligible.




                                                                                                                          99
      i)   Committee of Whole-Time directors
           The Committee of Whole-time Directors functions with the following main objectives:
           i.      Allotment of shares under ESOP.
           ii.     Grant of Powers of Attorney.
           iii.    Issue of duplicate share certificates.
           iv.     To apply for registration of the Company with various authorities of any state or Centre including sales tax
                   authorities, income tax authorities, shops & establishment authorities, and to do or perform all matters
                   relating to such matters.
           v.      To authorise persons to represent the Bank at General Meetings of any company, association of persons,
                   cooperative society or any institution, of which the Bank is a shareholder/member.
           vi.     To authorise employee(s) or others to execute, for and on behalf of the Bank, agreements, applications,
                   deeds, documents and any other writings in connection with the business of the Bank.
           vii.    Any other routine administrative matters.
           The Committee consists of all Whole-time Directors of the Bank.

           Meetings during the year:

           6 meetings of the Committee of Whole-time Directors were held during the year on 28th April, 2011, 30th May,
           2011, 22nd June, 2011, 20th July, 2011, 22nd August, 2011 and 16th September, 2011.

      j)   Acquisitions, divestments and Mergers Committee
           The Special Committee of the Board for Strategic Oversight of Integration of Businesses was constituted on 17th
           January 2011 and thereafter a new committee ‘Acquisitions, Divestments and Mergers Committee’ was formed on
           22nd April, 2011 in its place. The main function of the Committee is to discuss and consider any idea or proposal
           for merger and acquisition. This Committee will consider and give its in-principle approval in the matter and the
           proposal will then be placed before the Board of Directors for its final decision.

           Meetings and Attendance during the year:
           3 meetings of Acquisitions, Divestments and Mergers Committee were held during the year on 15th September,
           2011, 13th February, 2012 and 19th March, 2012. Smt. Shikha Sharma, Shri S. B. Mathur and Shri K. N. Prithviraj
           attended all the three meetings. Dr. R. H. Patil, Smt. Rama Bijapurkar, Shri V. R. Kaundinya and Shri Prasad R.
           Menon attended two meetings.
      k)   iT strategy Committee
           In terms of RBI circular dated 29th April, 2011 on ‘Working Group on Information Security, Electronic Banking,
           Technology Risk Management and Cyber Frauds - Implementation of Recommendations’, an IT Strategy Committee
           was constituted on 22nd October, 2011 and functions with the following main objectives:
           i.      Approving IT strategy and policies.
           ii.     Ensuring that management has an effective strategic planning process in place.
           iii.    Ensuring that the business strategy is aligned with the IT strategy.
           iv.     Ensuring that the IT organizational structure serves business requirements and direction.
           v.      Oversight over implementation of processes and practices that ensures IT delivers value to businesses.
           vi.     Monitoring the method that management uses to determine the IT resources needed to achieve strategic
                   goals and provide high-level direction for sourcing and use of IT resources.
           vii.    Ensuring proper balance of IT investments for sustaining the Bank’s growth.
           viii.   Assess exposure to IT risks and its controls and evaluating effectiveness of management’s monitoring of IT
                   risks.



100
            ix.   Assessing management’s performance in implementing IT strategies.
            x.    Assessing if IT architecture has been designed to derive maximum business value.
            xi.   Reviewing IT performance measurement and contribution to businesses.

            Meeting and Attendance during the year:

            One meeting of IT Strategy Committee was held during the year on 20th January, 2012. All the members of the
            Committee i.e. Shri Som Mittal, Shri Prasad R. Menon and Smt. Shikha Sharma attended the same.
3.   General body Meetings:
     The last three Annual General Meetings were held as follows:

     Annual General        date and day             Time               Location
     Meeting
     15th                   1.6.2009 - Monday       10.00 a.m.         Bhaikaka Bhavan, Ellisbridge, Ahmedabad – 380 006
     16th                   8.6.2010 - Tuesday      10.00 a.m.         Bhaikaka Bhavan, Ellisbridge, Ahmedabad – 380 006
     17th                  17.6.2011 - Friday       10.00 a.m.         J. B. Auditorium, Ahmedabad
                                                                       Management Association, AMA Complex, ATIRA,
                                                                       Dr. Vikram Sarabhai Marg, Ahmedabad 380 015
     The special resolutions passed during the last three Annual General Meetings/Postal Ballot were as under:

     Annual General         date of Annual         special resolutions
     Meeting                General Meeting

     15th                   1.6.2009               •	   Resolution No. 5 - Appointment of Statutory Auditors under Section
                                                        224A of the Companies Act, 1956.
                                                   •	   Resolution	 No.	 7	 	 -	 Partial	 modification	 to	 the	 approval	 given	 by	
                                                        shareholders through postal ballot notice dated 9th January, 2009 to
                                                        the Articles of Association of the Company in respect of separation
                                                        of the post of Chairman and CEO into the posts of i) Non-Executive
                                                        Chairman and ii) Managing Director. The effective date of the
                                                        alteration of Articles of Association changed to 1st June, 2009 instead
                                                        of 1st August, 2009.

     Resolution passed     Date of Scrutinizer’s   •	   Special Resolution for increasing the Number of Directors to Fifteen*.
     through Postal Ballot Report - 9.9.2009       •	   Special	 Resolution	 for	 alteration	 of	 Articles	 88	 and	 89(10)	 of	 the	
                                                        Articles of Association of the Bank in respect of increasing the number
                                                        of Directors to Fifteen and for alteration to the Articles of Association
                                                        in respect of replacing the words ‘Whole-time/Executive Director(s)’
                                                        wherever appearing in Articles 118 (2a), 118(3) and 118(4) of the
                                                        Articles of Association, by the words ‘Whole-time/Executive/Joint/
                                                        Deputy Managing Director(s)’**.
                                                   •	   Special	Resolution	for	Raising	Tier	I	Capital	***.




                                                                                                                             101
       Annual General         date of Annual          special resolutions
       Meeting                General Meeting

       16th                   8.6.2010                •	   Resolution No. 5 - Appointment of Statutory Auditors under Section
                                                           224A of the Companies Act, 1956.
                                                      •	   Resolution	 No.	 14	 	 -	 Approval	 of	 the	 shareholders	 of	 the	 Bank	
                                                           pursuant to Section 81 of the Companies Act, 1956 authorising the
                                                           Board of Directors of the Bank to issue, offer and allot equity stock
                                                           options under the Employees Stock Option Scheme of the Bank.
                                                      •	   Resolution	No.	15	-	Approval	of	the	shareholders	of	the	Bank	pursuant	
                                                           to Section 81(1A) of the Companies Act, 1956 authorising the Board
                                                           of Directors of the Bank to create, offer, issue and allot equity stock
                                                           options to the permanent employees of the subsidiaries of the
                                                           Bank, present and future, including any Director of the Subsidiary
                                                           Companies, under the Employees Stock Option Scheme of the Bank.

       17th                   17.6.2011               •	   Resolution No. 5 - Appointment of Statutory Auditors under Section
                                                           224A of the Companies Act, 1956.

       * Resolution proposing the increase in the number of Directors to Fifteen was passed through postal ballot. Shri Ashwin
       Lalbhai Shah, an Advocate of the Gujarat High Court, who was appointed as Scrutinizer by the Bank, received a total
       of 1,384 numbers of ballots. Out of 1,384 ballots received by Shri Shah, 1,341 were valid ballots and 43 were invalid
       ballots. Out of 1,341 shareholders, 99.44% had assented for the Resolution.
       ** Resolution proposing the alteration to the Articles of Association was passed through postal ballot. Shri Ashwin
       Lalbhai Shah appointed as Scrutinizer by the Bank as stated above, received a total of 1,384 numbers of ballots. Out
       of 1,384 ballots received by Shri Shah, 1,337 were valid ballots and 47 were invalid ballots. Out of 1,337 shareholders,
       99.99% had assented for the Resolution.
       *** Resolution proposing Raising of Tier I Capital was passed through postal ballot. Shri Ashwin Lalbhai Shah appointed
       as Scrutinizer by the Bank as stated above, received a total of 1,384 numbers of ballots. Out of 1,384 ballots received
       by Shri Shah, 1,336 were valid ballots and 48 were invalid ballots. Out of 1,336 shareholders, 99.24% had assented for
       the Resolution.
       No Resolution in the notice of the proposed Eighteenth Annual General Meeting is proposed to be passed by Postal
       Ballot.
4.     dividend history of Last five Years

       sr. no.   financial Year          rate of dividend                date of declaration (AGM)             date of Payment
                                                                                                              (date of dividend
                                                                                                                       Warrant)
       1.        2006-07                 45% (`4.50 per share)                                1.6.2007                   2.6.2007
       2.        2007-08                 60% (`6.00 per share)                                6.6.2008                   7.6.2008
       3.        2008-09                 100% (`10.00 per share)                              1.6.2009                   2.6.2009
       4.        2009-10                 120% (`12.00 per share)                              8.6.2010                    9.6.2010
       5.        2010-11                 140% (`14.00 per share)                              17.6.2011                 18.6.2011
       Unclaimed Dividends:
       All shareholders whose dividends are unpaid have been intimated individually to claim their dividends. Under the
       Transfer of Unclaimed Dividend Rules, it would not be possible to claim the dividend amount once deposited in Investors’
       Education & Protection Fund (IEPF). Shareholders are, therefore, again requested to claim their unpaid dividend, if not
       already claimed.




 102
     Transfer to Investor Protection Fund:
     Pursuant to Section 205C of the Companies Act, 1956, dividends that are unclaimed for a period of seven years are
     transferred to the Investors’ Education and Protection Fund administered by the Central Government. Listed in the table
     below are the dates of dividend declaration since 2004-05 and the corresponding dates when unclaimed dividends are
     due to be transferred to the Central Government.

     Year                                    dividend-Type                  date of declaration          due date of Transfer
     2004-05                                      Final                                 10.6.2005                      10.7.2012
     2005-06                                      Final                                  2.6.2006                        2.7.2013
     2006-07                                      Final                                  1.6.2007                        1.7.2014
     2007-08                                      Final                                  6.6.2008                       6.7.2015
     2008-09                                      Final                                  1.6.2009                        1.7.2016
     2009-10                                      Final                                  8.6.2010                        8.7.2017
     2010-11                                      Final                                 17.6.2011                       17.7.2018

5.   disclosures
     •	     There were no transactions of a material nature undertaken by the Bank with its promoters, directors or the
            management, their subsidiaries or relatives that may have a potential conflict with the interests of the Bank.
     •	     There are no instances of non-compliance by the Bank, penalties and strictures imposed by Stock Exchanges and
            SEBI/other statutory authorities on any matter related to capital markets during the last three years other than the
            following:
            i      A penalty of `2 lacs was imposed by SEBI vide its adjudication order dated 10th March, 2011. It was passed
                   with respect to the Debenture Trustee activity carried out by the Bank. The Bank had filed an appeal against
                   the said order with the Securities Appellate Tribunal. After taking note of the responses and submissions
                   made by the Bank and on the background that there was no loss caused to any Investor, the Hon’ble Tribunal
                   dismissed the appeal by upholding the Adjudication Officer’s Order with a special mention that the breaches
                   of SEBI Regulations did not appear to be intentional and lenient view needs to be taken. The Bank has since
                   paid the penalty as directed by SEBI.
            ii.    SEBI has conveyed to the Bank its displeasure in not exercising the required level of diligence in preventing
                   certain errors during the IPO of Orient Green Power Company Limited wherein the Bank had acted as a
                   merchant banker.
            iii.   During the buyback of shares by India Infoline Limited, wherein the Bank acted as a merchant banker, SEBI
                   has warned the Bank to be more careful in exercising due diligence while drafting public announcements in
                   future.
            iv.    During the last three years, penalty of `50 was imposed by National Securities Depository Limited on the
                   Bank for its activity as Depository Participant.
     •	     Whistleblower Policy: A central tenet in the Bank’s Policy on Corporate Governance is commitment to ethics,
            integrity, accountability and transparency. To ensure that the highest standards are maintained in these aspects
            on an on-going basis and to provide safeguards to various stakeholders (including shareholders, depositors and
            employees) the Bank has formulated a ‘Whistleblower Policy’. The Policy provides employees with the opportunity
            to address serious concerns arising from irregularities, malpractices and other misdemeanors committed by the
            Bank’s personnel by approaching a Committee set-up for the purpose (known as the Whistleblower Committee).
            In case senior management commits the offences, the Policy enables the Bank’s staff to report the concerns
            directly to the Audit Committee of the Board. The Policy is intended to encourage employees to report suspected
            or actual occurrence of illegal, unethical or inappropriate actions, behaviour or practices by staff without fear of
            retribution. The employees use this Policy regularly as a tool to voice their concerns on irregularities, malpractices
            and other misdemeanors. The Policy also provides the facility to report wrongdoing in an anonymous manner. It




                                                                                                                           103
            is hereby affirmed that the Bank has not denied personal access to the Audit Committee of the Board and that
            the Policy contains provisions protecting Whistleblowers from unfair termination and other unfair prejudicial and
            employment practice. The Whistleblower Policy is required to be reviewed by the Audit Committee of the Board
            at regular intervals.
       •	   The Bank has complied with the mandatory requirements regarding the Board of Directors, Audit Committee
            and other Board Committees and other disclosures as required under the provisions of Clause 49 of the Listing
            Agreement. The Bank has also complied with non-mandatory requirements like formation of HR & Remuneration
            Committee and Nomination Committee, sending half-yearly results to each shareholder, the performance
            evaluation of all Directors under ‘Fit & Proper’ Criteria laid down by RBI, unqualified financial statements and
            establishment of a Whistleblower Policy.
6.     Means of Communication
       •	   Quarterly/Half-yearly results are communicated through newspaper advertisements, press releases and by posting
            information on the Bank’s web site. Also, Half-yearly results are forwarded to each shareholder through post and
            also by email along with a letter from the Managing Director and Chief Executive Officer.
       •	   The results are generally published in the Economic Times and Gujarat Samachar or Sandesh or Divya Bhaskar.
       •	   Address of our official website is www.axisbank.com where the information is displayed.
       •	   Generally, after the half-yearly and the annual results are approved by the Board, formal presentations are made
            to analysts by the management and the same is also placed on the Bank’s website.
       •	   The Management’s Discussion and Analysis Report for the year 2011-12 is part of the Annual Report.
7.     General shareholder information

       •	   AGM: Date, time and venue       - 22nd June, 2012 – 10.00 A.M.
                                              At J. B. Auditorium
                                              Ahmedabad Management Association
                                              AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg Ahmedabad – 380 015.
       •	   Financial Year/ Calendar        - 1st April, 2012 to 31st March, 2013. The meetings to consider quarterly results
                                              for the quarter ending June 2012, September 2012 and December 2012 are
                                              proposed to be held during second half of July 2012, October 2012 and
                                              January 2013. The meeting to consider audited annual accounts and Q4 results
                                              is proposed to be held during the second half of April 2013.
       •	   Date of Book Closure            - 16th June, 2012 to 22nd June, 2012 (both days inclusive)
                                              The Dividend would be paid to the shareholders whose names stand on the
                                              Register of Members on the close of business hours of 15th June, 2012.
       •	   Dividend Payment Date           - The despatch of the dividend warrants/ECS credit would commence on
                                              23rd June, 2012 and is expected to be completed on or before 2nd July, 2012.
       •	   The Bank’s shares are listed on the following Stock Exchanges:
            i.    The BSE Limited, P. J. Towers, Dalal Street, Mumbai – 400 001.
            ii.   The National Stock Exchange of India Limited, Exchange Plaza, Plot No. C/1, “G” Block, Bandra-Kurla
                  Complex, Bandra (East), Mumbai – 400 051.
       •	   The Bank’s Global Depositary Receipts (GDRs) are listed and traded on the London Stock Exchange, 10 Paternoster
            Square, London EC4M 7LS, UK.
       •	   Listing of equity shares/GDRs on Stock Exchanges (with stock code):

             name of stock exchange                                                                stock Code
             The BSE Limited                                                                         532215
             The National Stock Exchange of India Limited                                           AXISBANK
             London Stock Exchange                                                                    AXB



 104
     The annual fees for financial year 2012-13 have been paid to all the Stock Exchanges where the shares are listed.
     ISIN for equity shares       :        INE 238A01026
     Name of Depositories         :        i. National Securities Depository Limited
                                           ii. Central Depository Services (India) Limited
     ISIN for GDRs                :        US05462W1099
•	   Market Price Data: The price of the Bank’s Share - High, Low during each month in the last financial year on NSE
     was as under:

     MonTh                                                            hiGh (`)                               LoW (`)
     April 2011                                                       1,460.45                               1,270.30
     May 2011                                                         1,298.00                               1,175.00
     June 2011                                                        1,316.00                               1,201.00
     July 2011                                                        1,342.00                               1,232.00
     August 2011                                                      1,367.55                                 991.80
     September 2011                                                    1,161.00                              1,010.60
     October 2011                                                     1,194.00                                 945.20
     November 2011                                                    1,156.30                                  921.10
     December 2011                                                    1,052.45                                 803.30
     January 2012                                                     1,088.00                                 784.00
     February 2012                                                    1,308.45                               1,053.30
     March 2012                                                       1,283.70                               1,095.20
•	   The Bank’s share price has moved in accordance with the movement of NIFTY. It touched a high of `1,460.45 in
     April 2011 and low of `784 in January 2012 on the National Stock Exchange.
     Performance in comparison to NIFTY


                1,600                                                                        7,000
                1,400                                                                        6,000
                1,200                                                                        5,000
                1,000
                                                                                             4,000
                 800
                                                                                             3,000   NIFTY
                 600
                                                                                                     Axis Bank
                                                                                             2,000
                 400
                 200                                                                         1,000

                    -                                                                        -
                                 1                1    1          1    1                 2
                        r-11 ay-1 un-11 ul-11 ug-1 ep-1 ct-11 ov-1 ec-1 an-12 eb-12 ar-1
                    Ap      M    J     J     A    S    O     N    D    J     F     M



•	   The high and low closing prices of the Bank’s GDRs traded during the last financial year on the London Stock
     Exchange are given below:

     MonTh                                                     hiGh (Usd)                              LoW (Usd)
     April 2011                                                      34.08                                  28.75
     May 2011                                                        29.00                                  25.63
     June 2011                                                       29.49                                  26.01
     July 2011                                                       31.96                                  28.00
     August 2011                                                     30.64                                  21.72
     September 2011                                                  25.25                                  20.55




                                                                                                                         105
           MonTh                                            hiGh (Usd)                              LoW (Usd)
           October 2011                                            24.43                                   19.10
           November 2011                                           23.89                                   17.54
           December 2011                                           20.60                                   14.75
           January 2012                                            23.00                                   15.40
           February 2012                                           26.95                                   21.66
           March 2012                                              25.90                                   21.00
      •	   registrar and share Transfer Agent:
           M/s. Karvy Computershare Private Limited
           Unit : Axis bank Limited
           Plot No. 17 to 24, Vithalrao Nagar
           Madhapur, Hyderabad – 500 081
           Phone No. 040-23420815 to 23420824
           Fax No. 040-23420814
           Email: einward.ris@karvy.com
           Contact Persons: Shri V. K. Jayaraman, GM (RIS)/Ms. Varalakshmi, Sr. Manager (RIS)
      •	   share Transfer system
           A Share Committee consisting of Whole-time Director (presently vacant), President (Law) and the Company
           Secretary of the Bank has been formed to look after the matters relating to the transfer of shares, issue of
           duplicate share certificates in lieu of mutilated share certificates, and other related matters. The resolutions passed
           by the Share Committee are confirmed at subsequent Board meetings. The Bank’s Registrar and Share Transfer
           Agent, M/s Karvy Computershare Pvt. Limited, Hyderabad looks after the work relating to transfers.
           The Bank ensures that all transfers are effected within a period of one month from the date of their lodgement.
           The equity shares of the Bank are to be compulsorily traded in Demat form by all investors. The Bank has entered
           into agreements with the National Securities Depository Limited (NSDL) and the Central Depository Services (India)
           Limited (CDSL) so as to provide the members an opportunity to hold and trade shares of the Bank in electronic
           form.
           The number of equity shares of Axis Bank transferred/processed during the last three years (excluding electronic
           transfer of shares in dematerialised form) is given below:

                                                                             2009-10               2010-11               2011-12
           Number of transfer deeds                                              599                   623                   421
           Number of shares transferred                                       43,000                42,200                32,601
           As required under Clause 47(c) of the listing agreement, a practicing Company Secretary has examined the records
           relating to share transfer deeds, memorandum of transfers, registers, files and other related documents on a half-
           yearly basis and has certified compliance with the provisions of the above clause of the listing agreement. The
           certificates are forwarded to BSE and NSE where the Bank’s equity shares are listed and also placed before the
           Shareholders/Investors Grievance Committee.
           As required by SEBI, a Share Capital Audit is conducted on a quarterly basis by a practicing Company Secretary, for
           the purpose of, inter alia, reconciliation of the total admitted equity share capital with the depositories and in the
           physical form with the total issued/paid-up equity capital of Axis Bank Limited. Certificates issued in this regard are
           placed before the Shareholders/Investors Grievance Committee and forwarded to BSE and NSE, where the equity
           shares of Axis Bank Limited are listed.




106
     shareholders of Axis bank with more than one percent holding at 31st March, 2012

                       name of shareholder                               no. of shares       % to total no. of shares
     Administrator of the Specified Undertaking of the Unit                9,72,24,373                          23.53
     Trust of India (SUUTI)
     Life Insurance Corporation of India*                                   4,00,40,156                             9.69
     The Bank of New York Mellon – as depositary for the                    3,52,95,613                             8.54
     equity shares representing the underlying shares to the
     Global Depositary Receipts (GDRs) issued to the investors
     overseas
     HSBC Bank (Mauritius) Limited A/c HSBC IRIS Investments                1,96,09,210                             4.75
     (Mauritius) Limited
     HSBC Bank (Mauritius) Limited A/c Cinnamon Capital                     1,81,21,155                             4.39
     Limited
     ICICI Prudential Life Insurance Company Limited                        1,40,46,355                             3.40
     Genesis Indian Investment Company Limited – General                    1,20,40,580                             2.91
     Sub Fund
     General Insurance Corporation of India                                   75,75,000                             1.83
     Vanguard Emerging Markets Stock Index Fund, A series of                  41,74,282                             1.01
     Vanguard International Equity Index Fund
     *Save and except 4,00,40,156 shares equivalent to 9.69% of the total paid up capital of the Bank held by LIC, all
     other holdings are not considered for arriving at the Promoter’s shareholding.
•	   distribution of shareholding as on 31st March, 2012

     Total nominal value `                                        :                                       4,13,20,39,520
     Nominal value of each equity share `                         :                                                   10
     Total number of equity shares                                :                                         41,32,03,952
     Distinctive numbers                                          :                                    1 to 41,32,03,952
           shareholding of                     shareholders                               share Amount
            nominal Value                                                                 nominal Value
     `                             `        numbers          % to total                      in ` % to total Capital
                                                          shareholders
     Up to                   5,000           1,84,379            95.77             11,89,68,860                     2.88
     5,001                  10,000              4,164              2.16             3,06,26,520                     0.74
     10,001                 20,000              1,602              0.83             2,29,15,880                     0.55
     20,001                 30,000                566              0.30              1,39,24,710                    0.34
     30,001                 40,000                278              0.14                96,64,920                    0.23
     40,001                 50,000                218              0.11                99,25,180                    0.24
     50,001                100,000                417              0.22             2,95,54,780                     0.72
     100,001                 Above                903              0.47          3,89,64,58,670                    94.30
     ToTAL                                   1,92,527           100.00           4,13,20,39,520                   100.00
     As on 31st March, 2012, out of total equity shares of the Bank, 41,10,28,114 shares representing 99.47% of the
     total shares have been dematerialised.
•	   The Bank has issued in the course of international offerings to the investors overseas, securities linked to ordinary
     shares in the form of Global Depositary Receipts (GDRs) during March/April 2005, July 2007 and September 2009
     and the GDRs have been listed and traded on the London Stock Exchange. The Bank has simultaneously issued
     the underlying shares to the Global Depositary Receipts (GDRs) to the investors overseas. The underlying equity
     shares have been listed and permitted to be traded on the NSE and BSE. The number of outstanding GDRs as on
     31st March, 2012 were 3,52,95,613.


                                                                                                                   107
       •	   The Bank has not issued any ADRs/Warrants or any other convertible instruments, the conversion of which will
            have an impact on equity shares.
       •	   Branch Locations – Given elsewhere
       •	   Address for Correspondence:
            The Company Secretary
            Axis bank Limited
            Registered Office
            ‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
            Law Garden, Ellisbridge, Ahmedabad – 380 006
            Phone No. :           079-26409322
            Fax No.        :      079-26409321
            Email          :      p.oza@axisbank.com/rajendra.swaminarayan@axisbank.com



                            Compliance with the Code of Conduct - fY 2011-12

I confirm that for the year under review all Directors and members of the Senior Management have affirmed compliance with
the Code of Conduct of the Bank.



shikha sharma
Managing Director and CEO

27th April, 2012




 108
AXIS BANK LIMITED GROUP - AUDITORS’ REPORT
To The Board of direcTors
of axis Bank LimiTed
1.   We have audited the attached Consolidated Balance Sheet of axis Bank LimiTed (“the Bank”) and its subsidiaries (the
     Bank and its subsidiaries constitute “the Group”) as at 31 March, 2012, the Consolidated Profit and Loss Account and the
     Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. These financial
     statements are the responsibility of the Bank’s Management and have been prepared by the Management on the basis
     of separate financial statements and other financial information regarding components. Our responsibility is to express an
     opinion on these statements based on our audit.
2.   We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require
     that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
     material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures
     in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates
     made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit
     provides reasonable basis for our opinion.
3.   We did not audit the financial statements of the subsidiaries whose financial statements reflect total assets of `137.28
     crores as at 31st March, 2012, total revenue of `80.74 crores and net cash flows amounting to `0.31 crores for the
     year then ended as considered in the Consolidated Financial Statements. The financial statements and other financial
     information of these subsidiaries have been audited by other auditors whose reports have been furnished to us and our
     opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the
     other auditors.
4.   The financial statements also include `1.27 crores being the Group’s proportionate share in the profit of an associate
     which has been recognised on the basis of the unaudited financial statements available with the Bank.
5.   Without qualifying our report, we invite attention to Note 1(a) of Schedule 18 regarding the Scheme of Arrangement for
     the demerger of Enam Securities Private Ltd. with the Bank’s subsidiary. For the reasons stated therein, no effect to the
     proposed Scheme has been given in the accounts.
6.   We report that the consolidated financial statements have been prepared by the Bank in accordance with the requirements
     of Accounting Standard 21 (Consolidated Financial Statements) and Accounting Standard 23 (Accounting for Investments
     in Associates in Consolidated Financial Statements) notified under the Companies (Accounting Standards) Rules, 2006.
7.   Based on our audit and on consideration of the separate audit reports on individual financial statements of the Bank and
     its subsidiaries and to the best of our information and according to the explanations given to us, subject to our comments
     in paragraph 4 regarding unaudited amount of the associate, in our opinion, the Consolidated Financial Statements give
     a true and fair view in conformity with the accounting principles generally accepted in India:
     (a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31 March, 2012;
     (b) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date
         and
     (c)   in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

For deLoiTTe haskins & seLLs
Chartered Accountants
(Registration No: 117365W)


Z. f. Billimoria
Partner
(Membership No. 42791)

Place : Mumbai
Date : 27th April, 2012




                                                                                                                             109
AXIS BANK LIMITED GROUP - BALANCE SHEET
consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                  as at              As at
                                                                                            31-03-2012         31-03-2011
                                                                schedule no.          (` in Thousands)    (` in Thousands)
caPiTaL and LiaBiLiTies
Capital                                                                        1             4,132,039          4,105,458
Reserves & Surplus                                                             2          222,685,105        184,840,608
Deposits                                                                       3        2,199,876,805      1,891,664,314
Borrowings                                                                     4          340,716,721        262,678,824
Other Liabilities and Provisions                                               5           86,754,428         82,377,311
ToTaL                                                                                   2,854,165,098      2,425,666,515
asseTs
Cash and Balances with Reserve Bank of India                                   6          107,029,222        138,861,631
Balances with Banks and Money at Call and Short Notice                         7           32,313,084         75,224,928
Investments                                                                    8          929,214,413        717,875,486
Advances                                                                       9        1,697,595,386      1,424,078,286
Fixed Assets                                                                  10           22,841,378         22,929,164
Other Assets                                                                  11           65,171,615         46,697,020
ToTaL                                                                                   2,854,165,098      2,425,666,515
Contingent liabilities                                                        12        4,802,382,789      4,453,928,740
Bills for collection                                                                      346,346,043        324,731,072
Significant Accounting Policies and Notes to accounts                   17 & 18
Schedules referred to above form an integral part of the Consolidated Balance Sheet


in terms of our report attached.                                                                 for axis Bank Ltd.



for deloitte haskins & sells                                                                     adarsh kishore
Chartered Accountants                                                                            Chairman


Z. f. Billimoria              k. n. Prithviraj      V. r. kaundinya         s. B. mathur         shikha sharma
Partner                       Director              Director                Director             Managing Director & CEO


P. J. oza                     somnath sengupta
Company Secretary             Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




 110
AXIS BANK LIMITED GROUP - PROFIT & LOSS ACCOUNT
consoLidaTed ProfiT & Loss accoUnT for The Year ended 31 march, 2012
                                                                                                   Year ended       Year ended
                                                                                                   31-03-2012      31-03-2011
                                                                            schedule no.     (` in Thousands) (` in Thousands)
I     income
      Interest earned                                                                  13        219,948,991      151,548,566
      Other income                                                                     14         54,871,922       46,714,492
      ToTaL                                                                                      274,820,913      198,263,058
II    exPendiTUre
      Interest expended                                                                15        139,691,770       85,886,082
      Operating expenses                                                               16         60,998,947       48,604,739
      Provisions and contingencies                                              18 (2.1.1)        31,945,090       30,325,512
      ToTaL                                                                                      232,635,807      164,816,333
III   Share in Profit/(Loss) of Associate                                                             12,683          (47,659)
IV    consoLidaTed neT ProfiT aTTriBUTaBLe To GroUP                                               42,197,789       33,399,066
      Balance in Profit & Loss Account brought forward from previous year                         48,644,522       33,716,338
V     amoUnT aVaiLaBLe for aPProPriaTion                                                          90,842,311       67,115,404
VI    aPProPriaTions :
      Transfer to Statutory Reserve                                                               10,605,513        8,471,227
      Transfer to/(from) Investment Reserve                                                                -         (149,372)
      Transfer to Capital Reserve                                                                    519,047           47,630
      Transfer to General Reserve                                                                     10,721        3,396,591
      Proposed dividend (includes tax on dividend)                              18 (2.1.6)         7,702,550        6,704,806
      Balance in Profit & Loss Account carried forward                                            72,004,480       48,644,522
      ToTaL                                                                                       90,842,311       67,115,404
VII   earninGs Per eQUiTY share                                                 18 (2.1.4)
      (Face value `10/- per share) (Rupees)
      Basic                                                                                           102.40             81.77
      Diluted                                                                                         101.66             80.44
      Significant Accounting Policies and Notes to accounts                      17 & 18
      Schedules referred to above form an integral part of the Consolidated Profit and Loss Account

in terms of our report attached.                                                                    for axis Bank Ltd.



for deloitte haskins & sells                                                                        adarsh kishore
Chartered Accountants                                                                               Chairman


Z. f. Billimoria             k. n. Prithviraj        V. r. kaundinya            s. B. mathur        shikha sharma
Partner                      Director                Director                   Director            Managing Director & CEO


P. J. oza                    somnath sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




                                                                                                                         111
AXIS BANK LIMITED GROUP - CASH FLOW STATEMENT
consoLidaTed cash fLoW sTaTemenT for The Year ended 31 march, 2012
                                                                    Year ended            Year ended
                                                                    31-03-2012           31-03-2011
                                                              (` in Thousands)      (` in Thousands)
cash flow from operating activities
net profit before taxes                                               62,699,932        50,971,944
adjustments for:
Depreciation on fixed assets                                           3,481,517         2,936,884
Depreciation on investments                                              580,985           992,677
Amortisation of premium on Held to Maturity investments                  627,967           605,614
Provision for Non Performing Assets (including bad debts)              8,604,298         9,551,195
Provision on standard assets                                           1,503,036         1,661,564
Provision for wealth tax                                                   3,600              4,558
Provision for interest tax                                                      -             2,879
(Profit)/loss on sale of fixed assets (net)                            (191,093)            71,485
Provision for country risk                                                48,100            24,500
Provision for restructured assets                                        888,600           150,615
Provision for other contingencies                                      (198,354)           412,204
Amortisation of deferred employee compensation                                  -             (186)
                                                                      78,048,588        67,385,933
adjustments for:
(Increase)/Decrease in investments                               (165,820,597)         (35,421,434)
(Increase)/Decrease in advances                                  (282,226,283)       (390,403,391)
Increase/(Decrease) in deposits                                      308,212,491       478,877,727
(Increase)/Decrease in other assets                                  (15,613,749)       (5,587,212)
Increase/(Decrease) in other liabilities & provisions                  1,790,934        17,794,733
Direct taxes paid                                                    (23,434,170)      (19,369,502)
net cash flow from operating activities                              (99,042,786)      113,276,854
cash flow from investing activities
Purchase of fixed assets                                              (3,965,641)      (13,711,316)
(Increase)/Decrease in Held to Maturity Investments                  (47,204,626)    (125,320,416)
Proceeds from sale of fixed assets                                       763,001           133,710
net cash used in investing activities                                (50,407,266)    (138,898,022)




 112
consoLidaTed cash fLoW sTaTemenT for The Year ended 31 march, 2012

                                                                                        Year ended              Year ended
                                                                                        31-03-2012             31-03-2011
                                                                                  (` in Thousands)        (` in Thousands)

cash flow from financing activities

Proceeds from issue of Subordinated debt, perpetual debts & upper Tier II
instruments (net of repayment)                                                             35,808,360          (1,625,906)

Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt
& upper Tier II instruments)                                                               42,229,537          92,609,218

Proceeds from issue of share capital                                                           26,581                 53,717

Proceeds from share premium                                                                 1,336,820           2,353,987

Payment of dividend                                                                        (6,699,437)         (5,695,356)

net cash generated from financing activities                                               72,701,861          87,695,660

Effect of exchange fluctuation translation reserve                                          2,003,938             (46,833)

Net increase in cash and cash equivalents                                             (74,744,253)             62,027,659

Cash and cash equivalents at the beginning of the year                                 214,086,559           152,058,900

Cash and cash equivalents at the end of the year                                       139,342,306           214,086,559

note :
1. Cash and cash equivalents comprise of cash on hand (including foreign currency notes), balances with Reserve Bank of
   India, balances with banks and money at call & short notice (Refer Schedules 6 and 7 of the Balance Sheet).




in terms of our report attached.                                                                 for axis Bank Ltd.



for deloitte haskins & sells                                                                     adarsh kishore
Chartered Accountants                                                                            Chairman


Z. f. Billimoria             k. n. Prithviraj        V. r. kaundinya        s. B. mathur         shikha sharma
Partner                      Director                Director               Director             Managing Director & CEO


P. J. oza                    somnath sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




                                                                                                                       113
AXIS BANK LIMITED GROUP - SCHEDULES
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                  as at              As at
                                                                                            31-03-2012         31-03-2011
                                                                                      (` in Thousands)    (` in Thousands)
schedULe 1 - caPiTaL

authorised capital
500,000,000 Equity Shares of `10/- each.                                                     5,000,000         5,000,000
issued, subscribed and Paid-up capital
413,203,952 (Previous year - 410,545,843) Equity Shares of `10/- each fully paid-up          4,132,039         4,105,458


schedULe 2 - reserVes and sUrPLUs
  i.   statutory reserve
       Opening Balance                                                                     27,820,350         19,349,123
       Additions during the year                                                           10,605,513          8,471,227
                                                                                           38,425,863         27,820,350
  ii. share Premium account
       Opening Balance                                                                    100,050,790         97,695,255
       Additions during the year                                                             1,336,820         2,355,535
       Less: Share issue expenses                                                                     -                  -
                                                                                          101,387,610        100,050,790
 iii. investment reserve account
       Opening Balance                                                                                -          149,372
       Additions during the year                                                                      -                  -
       Less: Deductions during the year                                                               -         (149,372)
                                                                                                      -                  -
 iV. General reserve
       Opening Balance                                                                       3,545,596           149,005
       Additions during the year                                                                19,221         3,396,591
                                                                                             3,564,817         3,545,596
 V. capital reserve
       Opening Balance                                                                       4,905,935         4,858,305
       Additions during the year                                                              519,047             47,630
                                                                                             5,424,982         4,905,935
 Vi. foreign currency Translation reserve [Refer Schedule 17 (5.5)]
       Opening Balance                                                                       (126,585)           (79,752)
       Additions during the year                                                             2,003,938           (46,833)
                                                                                             1,877,353          (126,585)
 Vii. Balance in Profit & Loss account                                                     72,004,480         48,644,522
       ToTaL                                                                              222,685,105        184,840,608




 114
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                  as at                 As at
                                                                                            31-03-2012            31-03-2011
                                                                                      (` in Thousands)       (` in Thousands)
schedULe 3 - dePosiTs
A.   I.     Demand Deposits
            (i)   From banks                                                                20,980,835            14,305,111
            (ii) From others                                                               376,461,674           354,770,292
     II.    Savings Bank Deposits                                                          516,679,577           408,503,090
     III.   Term Deposits
            (i)   From banks                                                               100,943,739            76,750,855
            (ii) From others                                                             1,184,810,980         1,037,334,966
     ToTaL                                                                               2,199,876,805         1,891,664,314
B.   I.     Deposits of branches in India                                                2,093,329,640         1,826,058,325
     II.    Deposits of branches outside India                                             106,547,165            65,605,989
     ToTaL                                                                               2,199,876,805         1,891,664,314


schedULe 4 - BorroWinGs
     I.     Borrowings in India
            (i)   Reserve Bank of India                                                       1,150,000                       -
            (ii) Other Banks #                                                                4,472,000           14,237,000
            (iii) Other institutions & agencies **                                         121,210,990            64,072,286
     II.    Borrowings outside India $                                                     213,883,731           184,369,538
     ToTaL                                                                                 340,716,721           262,678,824
     Secured borrowing included in I & II above                                                        -                      -

     #      Borrowings from other banks include Subordinated Debt of `359.60 crores (previous year `364.60 crores) in the
            nature of Non-Convertible Debentures, Perpetual Debt of Nil (previous year Nil) and Upper Tier II instruments of
            `59.10 crores (previous year `59.10 crores) [Also refer Notes 18 (2.1.2) & 18 (2.1.3)]

     ** Borrowings from other institutions & agencies include Subordinated Debt of `8,391.70 crores (previous year
        `4,966.70 crores) in the nature of Non-Convertible Debentures, Perpetual Debt of `214.00 crores (previous year
        `214.00 crores) and Upper Tier II instruments of `248.40 crores (previous year `248.40 crores) [Also refer Notes 18
        (2.1.2) & 18 (2.1.3)]

     $      Borrowings outside India include Perpetual Debt of `234.03 crores (previous year `205.14 crores) and Upper Tier II
            instruments of `1,067.24 crores (previous year `935.30 crores) [Also refer Note 18 (2.1.3)]




                                                                                                                        115
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                           as at               As at
                                                                     31-03-2012          31-03-2011
                                                               (` in Thousands)     (` in Thousands)
schedULe 5 - oTher LiaBiLiTies and ProVisions
I.     Bills payable                                                   30,853,220       37,445,308
II.    Inter-office adjustments (net)                                           -                  -
III.   Interest accrued                                                 6,478,322        4,143,337
IV.    Proposed dividend (includes tax on dividend)                     7,681,950        6,678,836
V.     Contingent provision against standard assets                     7,799,683        6,296,647
VI.    Others (including provisions)                                   33,941,253       27,813,183
       ToTaL                                                           86,754,428       82,377,311


schedULe 6 - cash and BaLances WiTh reserVe Bank of india
I.     Cash in hand (including foreign currency notes)                 35,957,450       22,082,834
II.    Balances with Reserve Bank of India :
            (i) in Current Account                                     71,071,772      116,778,797
            (ii) in Other Accounts                                              -                  -
       ToTaL                                                          107,029,222      138,861,631


schedULe 7 - BaLances WiTh Banks and moneY aT caLL and shorT noTice
I.     In India
       (i) Balance with Banks
            (a) in Current Accounts                                     3,516,323        4,407,510
            (b) in Other Deposit Accounts                               6,146,450       49,184,269
       (ii) Money at Call and Short Notice
            (a) With banks                                                      -           29,900
            (b) With other institutions                                         -                  -
       ToTaL                                                            9,662,773       53,621,679
II.    Outside India
       i)   in Current Accounts                                         7,669,498        4,835,529
       ii) in Other Deposit Accounts                                    3,845,538       10,658,205
       iii) Money at Call & Short Notice                               11,135,275        6,109,515
       ToTaL                                                           22,650,311       21,603,249
       Grand ToTaL (i+ii)                                              32,313,084       75,224,928




 116
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                 as at                  As at
                                                                                           31-03-2012             31-03-2011
                                                                                     (` in Thousands)        (` in Thousands)
schedULe 8 - inVesTmenTs
i.    investments in india in -
      (i) Government Securities ## **                                                     584,162,116           441,549,553
      (ii) Other approved securities                                                                   -                      -
      (iii) Shares                                                                           7,399,921             6,928,717
      (iv) Debentures and Bonds                                                           231,507,877           180,704,920
      (v) Investment in Joint Ventures $                                                       355,024               342,341
      (vi) Others (Mutual Fund units, CD/CP, NABARD deposits, PTC etc.) @                   98,516,571            82,618,299
      Total Investments in India                                                          921,941,509           712,143,830
ii.   investments outside india in -
      (i) Government Securities (including local authorities)                                1,170,306               429,340
      (ii) Subsidiaries and/or joint ventures abroad (amount less than `1,000
           for current year and previous year)                                                         -                      -
      (iii) Others                                                                           6,102,598             5,302,316
      Total Investments outside India                                                        7,272,904             5,731,656
      Grand ToTaL (i + ii)                                                                929,214,413           717,875,486

      ## Includes securities costing `4,427.15 crores (previous year `4,424.90 crores) pledged for availment of fund transfer
         facility, clearing facility and margin requirements.

      @ Includes priority sector shortfall deposits `5,100.53 crores (previous year `4,064.71 crores) and PTC’s `204.67 crores
        (previous year `212.98 crores) net of depreciation.

      ** Inclusive of Repo Lending of `3,675.00 crores (previous year Nil) and net of Repo borrowing of `3,140.76 crores
         (previous year Nil) under the Liquidity Adjustment Facility in line with the RBI requirements.

      $   Represents investment accounted as an Associate in line with AS-23, Accounting for Investments in Associates in
          Consolidated Financial Statements, as notified under the Companies (Accounting Standards) Rules, 2006 [Refer
          Schedule 17(2)(d)].




                                                                                                                        117
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                    as at                As at
                                                                                              31-03-2012           31-03-2011
                                                                                        (` in Thousands)      (` in Thousands)
schedULe 9 - adVances
A.   (i)    Bills purchased and discounted *                                                  39,089,332           34,812,948
     (ii)   Cash credits, overdrafts and loans repayable on demand @                         468,608,528          349,803,398
     (iii) Term loans #                                                                    1,189,897,526        1,039,461,940
     ToTaL                                                                                 1,697,595,386        1,424,078,286
B.   (i)    Secured by tangible assets $                                                   1,417,163,384        1,131,026,880
     (ii)   Covered by Bank/Government Guarantees &&                                          50,233,791           32,394,561
     (iii) Unsecured                                                                         230,198,211          260,656,845
     ToTaL                                                                                 1,697,595,386        1,424,078,286
C.   I.     Advances in India
            (i) Priority Sector                                                              484,792,379          412,891,152
            (ii) Public Sector                                                                32,535,626           30,039,403
            (iii) Banks                                                                         3,477,937           2,408,096
            (iv) Others                                                                      923,767,773          782,963,737
     ToTaL                                                                                 1,444,573,715        1,228,302,388
     II.    Advances Outside India
            (i)    Due from banks                                                               1,127,900           4,196,520
            (ii)   Due from others -
                   (a) Bills purchased and discounted                                           6,438,231           6,264,497
                   (b) Syndicated loans                                                      108,035,085           70,389,401
                   (c)   Others                                                              137,420,455          114,925,480
     ToTaL                                                                                   253,021,671          195,775,898
     Grand ToTaL [c i + c ii]                                                              1,697,595,386        1,424,078,286

     *      Net of borrowings under Bills Rediscounting Scheme `3,480.00 crores (previous year `1,800.00 crores)
     @      Net of borrowings under Inter Bank Participation Certificate `60.36 crores (previous year Nil)
     #      Net of borrowings under Inter Bank Participation Certificate `7,968.24 crores (previous year `3,401.00 crores)
     $      Includes advances against book debts
     && Includes advances against L/Cs issued by banks




 118
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                  as at              As at
                                                                                            31-03-2012         31-03-2011
                                                                                      (` in Thousands)    (` in Thousands)
schedULe 10 - fixed asseTs
I.     Premises
       Gross Block
       At cost at the beginning of the year                                                  9,117,340           891,351
       Additions during the year                                                                96,841         8,244,785
       Deductions during the year                                                            (212,237)           (18,796)
       TOTAL                                                                                 9,001,944         9,117,340
       depreciation
       As at the beginning of the year                                                        198,381            161,989
       Charge for the year                                                                    146,310             46,669
       Deductions during the year                                                             (82,455)           (10,277)
       Depreciation to date                                                                   262,236            198,381
       net Block                                                                             8,739,708         8,918,959
II.    Other fixed assets (including furniture & fixtures)
       Gross Block
       At cost at the beginning of the year                                                25,442,102         20,384,691
       Additions during the year                                                             3,300,281         5,810,762
       Deductions during the year                                                          (1,616,733)          (753,351)
       TOTAL                                                                               27,125,650         25,442,102
       Depreciation
       As at the beginning of the year                                                     11,661,494          9,327,953
       Charge for the year                                                                   3,335,207         2,890,215
       Deductions during the year                                                          (1,174,546)          (556,674)
       Depreciation to date                                                                13,822,155         11,661,494
       net Block                                                                           13,303,495         13,780,608
III.   CAPITAL WORK-IN-PROGRESS (including capital advances)                                  798,175            229,597
       Grand ToTaL (i + ii + iii)                                                          22,841,378         22,929,164


schedULe 11 - oTher asseTs
I.     Inter-office adjustments (net)                                                                 -                   -
II.    Interest Accrued                                                                    24,194,449         17,165,984
III.   Tax paid in advance/tax deducted at source (net of provisions)                        1,280,325           470,277
IV.    Stationery and stamps                                                                    12,623            11,794
V.     Non banking assets acquired in satisfaction of claims                                  262,681             53,174
VI.    Others #                                                                            39,421,537         28,995,791
       ToTaL                                                                               65,171,615         46,697,020
       # Includes deferred tax assets of `1,027.44 crores (previous year `816.87 crores)




                                                                                                                    119
schedULes forminG ParT of The consoLidaTed BaLance sheeT as aT 31 march, 2012
                                                                                                    as at              As at
                                                                                              31-03-2012         31-03-2011
                                                                                        (` in Thousands)    (` in Thousands)
schedULe 12 - conTinGenT LiaBiLiTies
I.     Claims against the Group not acknowledged as debts                                      2,602,142         2,344,299
II.    Liability for partly paid investments                                                            -                  -
III.   Liability on account of outstanding forward exchange and derivative contracts:
       (a) Forward Contracts                                                              2,009,254,981      1,854,438,087
       (b) Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest
           Rate Futures                                                                   1,752,490,787      1,647,016,628
       (c) Foreign Currency Options                                                         130,543,459        141,258,629
       TOTAL (a + b + c)                                                                  3,892,289,227      3,642,713,344
IV.    Guarantees given on behalf of constituents
       In India                                                                             467,505,902        464,332,544
       Outside India                                                                         98,612,604         76,278,216
V.     Acceptances, endorsements and other obligations                                      302,612,607        249,276,960
VI.    Other items for which the Group is contingently liable                                38,760,307         18,983,377
       Grand ToTaL (i + ii + iii + iV + V + Vi)                                           4,802,382,789      4,453,928,740




  120
schedULes forminG ParT of The consoLidaTed ProfiT & Loss accoUnT for The Year ended 31 march, 2012
                                                                                            Year ended         Year Ended
                                                                                            31-03-2012        31-03-2011
                                                                                      (` in Thousands)   (` in Thousands)
schedULe 13 - inTeresT earned
I.     Interest/discount on advances/bills                                                153,793,526       104,031,042
II.    Income on investments                                                               63,942,667        44,386,841
III.   Interest on balances with Reserve Bank of India and other inter-bank funds             984,267         1,826,199
IV.    Others                                                                               1,228,531         1,304,484
       ToTaL                                                                              219,948,991       151,548,566

schedULe 14 - oTher income
I.   Commission, exchange and brokerage                                                    44,156,852        33,967,236
II.  Profit/(Loss) on sale of Investments (net)                                               750,000         3,677,215
III. Profit/(Loss) on sale of fixed assets (net)                                              191,092           (71,485)
IV. Profit on exchange transactions/Derivatives transactions (net)                          6,739,668         5,636,045
V. Income earned by way of dividends etc. from
     subsidiaries/companies and/or joint venture abroad/in India                                    -                 -
VI. Miscellaneous Income                                                                    3,034,310         3,505,481
     [including recoveries on account of advances/investments/derivative
     receivables written off in earlier years `291.84 crores (previous year
     `325.22 crores) and net loss on account of portfolio sell downs/securitisation
     `1.60 crores (previous year net profit of `17.96 crores)]
     ToTaL                                                                                 54,871,922        46,714,492

schedULe 15 - inTeresT exPended
I.   Interest on deposits                                                                 121,759,124        74,952,925
II.  Interest on Reserve Bank of India/Inter-bank borrowings                                2,319,578         1,609,768
III. Others                                                                                15,613,068         9,323,389
     ToTaL                                                                                139,691,770        85,886,082

schedULe 16 - oPeraTinG exPenses
I.    Payments to and provisions for employees                                             22,540,184        17,458,025
II.   Rent, taxes and lighting                                                              6,685,783         6,920,585
III.  Printing and stationery                                                                 950,424         1,106,365
IV.   Advertisement and publicity                                                             903,390           804,167
V.    Depreciation on group’s property                                                      3,481,517         2,936,884
VI.   Directors’ fees, allowance and expenses                                                  10,202             7,831
VII. Auditors’ fees and expenses                                                               12,044             9,885
VIII. Law charges                                                                             182,725           133,752
IX.   Postage, telegrams, telephones, etc.                                                  2,622,730         2,020,463
X.    Repairs and maintenance                                                               5,382,245         3,892,076
XI.   Insurance                                                                             2,315,133         1,850,723
XII. Other expenditure                                                                     15,912,570        11,463,983
      ToTaL                                                                                60,998,947        48,604,739




                                                                                                                   121
17    significant accounting policies for the year ended 31 march, 2012
      (Currency: In Indian Rupees)

1     Principles of consolidation

      The consolidated financial statements comprise the financial statements of Axis Bank Limited (‘the Bank’) and its
      subsidiaries, which together constitute ‘the Group’.

      The Bank consolidates its subsidiaries in accordance with AS 21, Consolidated Financial Statements notified under
      the Companies (Accounting Standards) Rules, 2006, on a line-by-line basis by adding together the like items of
      assets, liabilities, income and expenditure. All significant inter-company accounts and transactions are eliminated on
      consolidation. Further, the Bank accounts for investments in associates in accordance with AS-23, Accounting for
      Investments in Associates in Consolidated Financial Statements, notified under the Companies (Accounting Standard)
      Rules, 2006, by the equity method of accounting.

2     Basis of preparation

      a)    The financial statements have been prepared and presented under the historical cost convention on the accrual
            basis of accounting, and comply with the generally accepted accounting principles, statutory requirements
            prescribed under the Banking Regulation Act, 1949, the circulars and guidelines issued by the Reserve Bank
            of India (‘RBI’) from time to time and the Accounting Standards notified under the Companies (Accounting
            Standards) Rules, 2006, to the extent applicable and current practices prevailing within the banking industry in
            India.

      b)    The consolidated financial statements present the accounts of Axis Bank Limited with its following subsidiaries
            and associates:

            name                                               relation               country of         ownership interest
                                                                                    incorporation
            Axis Securities and Sales Ltd.                     Subsidiary                India                 100.00%
            Axis Private Equity Ltd.                           Subsidiary                India                 100.00%
            Axis Trustee Services Ltd.                         Subsidiary                India                 100.00%
            Axis Mutual Fund Trustee Ltd.                      Subsidiary                India                 100.00%
            Axis Asset Management Company Ltd.                 Subsidiary                India                 100.00%
            Axis U.K. Limited                                  Subsidiary                 U.K.                 100.00%
            Bussan Auto Finance India Private Ltd.             Associate                 India                  26.00%
            (see ‘d’ below)
      c)    The audited financial statements of the above subsidiaries and the unaudited financial statements of the associate
            have been drawn up to the same reporting date as that of the Bank, i.e. 31 March, 2012.

      d)    This investment does not fall within the definition of a Joint Venture as per AS-27, Financial Reporting of
            Interest in Joint Ventures, notified under the Companies (Accounting Standards) Rules, 2006, and the said
            accounting standard is thus not applicable. However, pursuant to RBI guidelines, the Bank has classified the
            same as investment in joint ventures in the balance sheet. Such investment has been accounted as an Associate
            in line with AS-23, Accounting for Investment in Associates in Consolidated Financial Statements notified under
            the Companies (Accounting Standards) Rules, 2006.

3     Use of estimates

      The preparation of the financial statements in conformity with the generally accepted accounting principles requires the
      Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
      and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ
      from those estimates. The Management believes that the estimates used in the preparation of the financial statements
      are prudent and reasonable. Any revisions to the accounting estimates are recognised prospectively in the current and
      future periods.



122
4   changes in accounting estimates

    4.1   Change in estimated useful life of fixed assets
          Group
          During the year, the Group has revised the estimated useful life of certain fixed assets viz; cheque book encoder,
          currency counting machine, cheque encoder, fax machine/telex, fake note detector, UPS, VSAT and scrollers
          from 10 years to 5 years. As a result of the aforesaid revision, the net depreciation charge for the year is higher
          by `22.17 crores with a corresponding decrease in the net block of the fixed assets.
    4.2   Change in accounting of brokerage expense
          Axis Asset Management Company Ltd.
          Upfront brokerage on close ended and fixed tenure schemes is amortized over the tenure of the respective
          scheme and in case of Equity Linked Saving Scheme (ELSS), upfront brokerage is amortized over 3 years. The
          unamortized portion of the brokerage is carried forward as prepaid expense. Any other brokerage is expense out
          in the year in which they are incurred.
          Had the Company continued to use the earlier method of charging brokerage, charge to the Profit and Loss
          account for the current year would have been higher by `6.75 crores.
5   significant accounting policies
    5.1   Investments
          Axis Bank Ltd.
          Classification
          In accordance with the RBI guidelines, investments are classified at the date of purchase as:
	   	     •	   Held	for	Trading	(‘HFT’);
	   	     •	   Available	for	Sale	(‘AFS’);	and
	   	     •	   Held	to	Maturity	(‘HTM’).
          Investments that are held principally for sale within a short period are classified as HFT securities. As per the RBI
          guidelines, HFT securities, which remain unsold for a period of 90 days are reclassified as AFS securities as on
          that date.
          Investments that the Bank intends to hold till maturity are classified under the HTM category.
          All other investments are classified as AFS securities.
          However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
          Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures
          and Others.
          Investments made outside India are classified under three categories – Government Securities, Subsidiaries and/
          or Joint Ventures abroad and Others.
          Transfer of security between categories
          Transfer of security between categories of investments is accounted as per the RBI guidelines.
          Acquisition cost
          Costs including brokerage, commission pertaining to investments, paid at the time of acquisition, are charged to
          the Profit and Loss Account.
          Broken period interest is charged to the Profit and Loss Account.
          Cost of investments is computed based on the weighted average cost method.




                                                                                                                        123
              Valuation

              Investments classified under the HTM category are carried at acquisition cost unless it is more than the face
              value, in which case the premium is amortised over the period remaining to maturity. In terms of RBI guidelines,
              discount on securities held under HTM category is not accrued and such securities are held at the acquisition cost
              till maturity.

              Investments classified under the AFS and HFT categories are marked to market. The market/fair value of quoted
              investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the scrip as available from the
              trades/quotes on the stock exchanges or prices declared by Primary Dealers Association of India (‘PDAI’) jointly
              with Fixed Income Money Market and Derivatives Association of India (‘FIMMDA’), periodically. Net depreciation,
              if any, within each category of each investment classification is recognised in the Profit and Loss Account. The
              net appreciation if any, under each category of each investment classification is ignored. The book value of
              individual securities is not changed consequent to the periodic valuation of investments.

              Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate of Deposits being discounted instruments,
              are valued at carrying cost.
              Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.

              Market value of investments where current quotations are not available, is determined as per the norms
              prescribed by the RBI as under:

	         	   •	   in	case	of	unquoted	bonds,	debentures	and	preference	shares	where	interest/dividend	is	received	regularly	
                   ( i.e. not overdue beyond 90 days), the market price is derived based on the YTM for Government Securities
                   as notified by FIMMDA/PDAI and suitably marked up for credit risk applicable to the credit rating of the
                   instrument. The matrix for credit risk mark-up for each categories and credit ratings along with residual
                   maturity issued by FIMMDA is adopted for this purpose;

	         	   •	   in	case	of	bonds	and	debentures	(including	Pass	Through	Certificates)	where	interest	is	not	received	regularly	
                   ( i.e. overdue beyond 90 days), the valuation is in accordance with prudential norms for provisioning as
                   prescribed by RBI;

	         	   •	   equity	shares,	for	which	current	quotations	are	not	available	or	where	the	shares	are	not	quoted	on	the	
                   stock exchanges, are valued at break-up value (without considering revaluation reserves, if any) which is
                   ascertained from the company’s latest Balance Sheet. In case the latest Balance Sheet is not available, the
                   shares are valued at Re 1 per company;

	         	   •	   units	of	Venture	Capital	Funds	(VCF)	held	under	AFS	category	where	current	quotations	are	not	available	
                   are marked to market based on the Net Asset Value (NAV) shown by VCF as per the latest audited financials
                   of the fund. In case the audited financials are not available for a period beyond 18 months, the investments
                   are valued at Re 1 per VCF. Investment in unquoted VCF after 23rd August, 2006 are categorised under
                   HTM category for the initial period of three years and valued at cost as per RBI guidelines; and

	         	   •	   investments	in	Credit	Linked	Notes	(‘CLNs’),	are	valued	based	on	current	quotations	where	the	same	are	
                   available. In the absence of quotes, the same are valued based on internal valuation methodology using
                   appropriate mark-up and other estimates such as price of the underlying Foreign Currency Convertible
                   Bond (FCCB), rating category of the CLN etc.

	         	   •	   security	 receipts	 are	 valued	 as	 per	 the	 Net	 Asset	 Value	 (NAV)	 obtained	 from	 the	 issuing	 Reconstruction	
                   Company / Securitisation Company.

              Investments in joint ventures are categorised as HTM and assessed for impairment to determine permanent
              diminution, if any, in accordance with the RBI guidelines.

              Realised gains on investments under the HTM category are recognised in the Profit and Loss Account and
              subsequently appropriated to Capital Reserve account in accordance with the RBI guidelines. Losses are
              recognised in the Profit and Loss Account.



    124
      All investments are accounted for on settlement date except investments in equity shares which are accounted
      for on trade date as the corporate actions are effected in equity on the trade date.

      Repurchase and reverse repurchase transactions

      Repurchase and reverse repurchase transactions [excluding those conducted under the Liquid Adjustment Facility
      (LAF) with RBI] are accounted as collateralised borrowing and lending respectively. Such transactions done under
      LAF are accounted as outright sale and outright purchase respectively. However, depreciation in their value, if
      any, compared to their original cost, is recognised in the Profit and Loss Account.

      Subsidiaries

      Investments which are readily realisable and intended to be held for not more than one year from the date on
      which such investments are made, are classified as current investments. All other investments are classified as
      long term investments.

      Current investments are carried in the financial statements at lower of cost and fair value determined on an
      individual investment basis. Any reduction in the carrying amount and any reversal of such reductions are
      charged or credited to the Profit and Loss Account.

      Long term investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the
      value of such investments.

5.2   Advances

      Axis Bank Ltd.

      Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are
      stated net of specific provisions made towards NPAs and floating provisions. Further, NPAs are classified into
      sub-standard, doubtful and loss assets based on the criteria stipulated by the RBI. Provisions for NPAs are made
      for sub-standard and doubtful assets at rates as prescribed by the RBI with the exception for agriculture advances
      and schematic retail advances. In respect of schematic retail advances, provisions are made in terms of a bucket-
      wise policy upon reaching specified stages of delinquency (90 days or more of delinquency) under each type
      of loan, which satisfies the RBI prudential norms on provisioning. Provisions in respect of agriculture advances
      classified into sub-standard and doubtful assets are made at rates which are higher than those prescribed by the
      RBI.

      Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines.
      NPAs are identified by periodic appraisals of the loan portfolio by the Management.

      Amounts recovered against debts written off are recognised in the profit and loss account.

      For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which
      requires the diminution in the fair value of the assets to be provided at the time of restructuring.

      A general provision @ 0.25% in case of direct advances to agricultural and SME sectors, 1% in respect of
      advances classified as commercial real estate, 2% in respect of housing loans at teaser rates and certain class of
      restructured assets and 0.40% for all other advances is made as prescribed by the RBI.

5.3   Country risk
      Axis Bank Ltd.

      In addition to the provisions required to be held according to the asset classification status, provisions are held
      for individual country exposure (other than for home country). The countries are categorised into seven risk
      categories namely insignificant, low, moderate, high, very high, restricted and off-credit and provision is made on
      exposures exceeding 180 days on a graded scale ranging from 0.25% to 100%. For exposures with contractual
      maturity of less than 180 days, 25% of the normal provision requirement is held. If the country exposure (net) of
      the Bank in respect of each country does not exceed 1% of the total funded assets, no provision is maintained
      on such country exposure.



                                                                                                                  125
          5.4   Securtisation
                Axis Bank Ltd.
                The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose
                Vehicle (‘SPV’). In most cases, post securtisation, the Bank continues to service the loans transferred to the
                assignee/SPV. The Bank also provides credit enhancement in the form of cash collaterals and/or by subordination
                of cash flows to Senior Pass Through Certificate (‘PTC’) holders. In respect of credit enhancements provided or
                recourse obligations (projected delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/
                disclosure is made at the time of sale in accordance with AS 29, Provisions, Contingent Liabilities and Contingent
                Assets as notified under the Companies (Accounting Standards) Rules, 2006.
                In accordance with RBI guidelines of 2nd February 2006, on ‘Guidelines on Securitisation of Standard Assets’, gain
                on securtisation transactions is recognised over the period of the underlying securities issued by the SPV. Loss on
                securtisation is immediately debited to the Profit and Loss Account.
          5.5   Foreign currency transactions
                Axis Bank Ltd.
                In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
                prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the
                Balance Sheet date at rates notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses
                resulting from year end revaluations are recognised in the Profit and Loss Account.
                Financial statements of foreign branches classified as non-integral foreign operations are translated as follows:
	         	     •	   Assets	and	liabilities	(both	monetary	and	non-monetary	as	well	as	contingent	liabilities)	are	translated	at	
                     closing rates notified by FEDAI at the year end.
	         	     •	   Income	and	expenses	are	translated	at	the	rates	prevailing	on	the	date	of	the	transactions.
	         	     •	   All	resulting	exchange	differences	are	accumulated	in	a	separate	‘Foreign	Currency	Translation	Reserve’	till	
                     the disposal of the net investments.
                Outstanding forward exchange contracts (excluding currency swaps undertaken to hedge foreign currency
                assets/liabilities and funding swaps which are not revalued) and spot exchange contracts are revalued at year
                end exchange rates notified by FEDAI for specified maturities and at interpolated rates for contracts of interim
                maturities. The resulting gains or losses on revaluation are included in the Profit and Loss Account in accordance
                with RBI/FEDAI guidelines. The forward exchange contracts of longer maturities where exchange rates are not
                notified by FEDAI are revalued at the forward exchange rates implied by the swap curves in respective currencies.
                The resultant gains or losses are recognised in the Profit and Loss Account.
                Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding
                swaps is recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap
                period.
                Currency futures contracts are marked to market using daily settlement price on a trading day, which is the
                closing price of the respective futures contracts on that day. While the daily settlement price is computed based
                on the last half an hour weighted average price of such contract, the final settlement price is taken as the RBI
                reference rate on the last trading day of the futures contract or as may be specified by the relevant authority
                from time to time. All open positions are marked to market based on the settlement price and the resultant
                marked to market profit/loss is daily settled with the exchange.
                Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price
                of each individual option provided by the exchange.
                Contingent liabilities on account of foreign exchange contracts/options, guarantees, acceptances, endorsements
                and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified by
                FEDAI.




    126
      Axis Private Equity Ltd. and Axis Asset Management Company Ltd.

      Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions.
      Monetary assets and liabilities denominated in foreign currencies as at the Balance Sheet date are translated at
      the closing rate on that date. The exchange differences, if any, either on settlement or translation are recognised
      in Profit and Loss Account.

5.6   Derivative transactions

      Axis Bank Ltd.

      Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent
      liabilities. The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative
      contracts are revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised
      in the Profit and Loss Account and correspondingly in other assets or other liabilities respectively. For hedge
      transactions, the Bank identifies the hedged item (asset or liability) at the inception of transaction itself. The
      effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. Hedge swaps are
      accounted for on accrual basis except in case of swaps designated with an asset or liability that is carried at
      market value or lower of cost or market value in the financial statements. In such cases the swaps are marked
      to market with the resulting gain or loss recorded as an adjustment to the market value of designated asset or
      liability. The premium on option contracts is accounted for as per Foreign Exchange Dealers’ Association of India
      guidelines. Pursuant to the RBI guidelines any receivables under derivative contracts comprising of crystallised
      receivables as well as positive Mark to Market (MTM) in respect of future receivables which remain overdue for
      more than 90 days are reversed through the profit and loss account and are held in separate Suspense account.

5.7   Revenue recognition

      Axis Bank Ltd.

      Interest income is recognised on an accrual basis except interest income on non-performing assets, which
      is recognised on receipt in accordance with AS-9, Revenue Recognition as notified under the Companies
      (Accounting Standards) Rules, 2006 and the RBI guidelines.

      Fees and commission income is recognised when due, except for guarantee commission which is recognised
      pro-rata over the period of the guarantee.

      Dividend is accounted on an accrual basis when the right to receive the dividend is established.

      Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.

      Gain or loss arising on sale of NPAs is accounted as per the guidelines prescribed by the RBI, which require
      provisions to be made for any deficit (where sale price is lower than the net book value), while surplus (where
      sale price is higher than the net book value) is ignored.

      Arrangership/syndication fee is accounted for on completion of the agreed service and when right to receive is
      established.

      subsidiaries

      Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
      the revenue can be reliably measured. Fee income is recognised on the basis of accrual when all the services are
      performed.

      Interest income is recognised on an accrual basis.

      Income from sale of Investments is determined on weighted average basis and recognised on the trade date
      basis.

      Insurance policy administration fee income is recognised based on the proportionate completion method.




                                                                                                                  127
            Brokerage income in relation to stock broking activity is recognised on a trade date basis. Gains/losses on dealing
            in securities are recognised on a trade date basis.

            Income from SVP (Super Value Plan) to the extent of account opening fees is recognised upfront and balance
            is amortised over the validity of plan. Income from other existing prepaid plans is recognised on utilization of
            complementary turnover limit or validity of plan, whichever is earlier

            Trusteeship fees are recognised, on a straight line basis, over the period when services are performed. Initial
            acceptance fee is recognised as and when the ‘Offer letter’ for the services to be rendered is accepted by the
            customer.

            Management fees are recognised on accrual basis at specific rates, applied on the average daily net assets
            of each scheme. The fees charged are in accordance with the terms of Scheme Information Documents of
            respective schemes and are in line with the provisions of SEBI (Mutual Funds) Regulations, 1996 as amended
            from time to time.

            Portfolio Management Fees are recognised on an accrual basis as per the terms of the contract with the
            customers.

            Marketing Advisory fees and fees received for acting as Point of Service (POS) for CDSL ventures Ltd (CVL), an
            agency mandated by the Mutual Fund industry to handle the Know your Clients (KYC) documentation and
            necessary database are recognised on an accrual basis.

            Trustee fee is recognised on accrual basis, at the specific rates/amount approved by the Board of Directors of the
            Company, within the limits specified under the Deed of Trust, and is applied on the net assets of each scheme
            of Axis Mutual Fund.

      5.8   Scheme expenses

            Axis Asset Management Company Ltd.

            Fund Expense

            Expenses of schemes of Axis Mutual Fund in excess of the stipulated limits as per SEBI (Mutual Fund) Regulations,
            1996 and expenses incurred directly (inclusive of advertisement/brokerage expenses) on behalf of schemes of
            Axis Mutual Fund are charged to the Profit and Loss Account.

            New fund offer expenses

            Expenses relating to new fund offer of Axis Mutual Fund are charged to the Profit and Loss Account in the year
            in which they are incurred.

            Brokerage

            Upfront brokerage on close ended and fixed tenure schemes is amortized over the tenure of the respective
            scheme and in case of Equity Linked Saving Scheme (ELSS), upfront brokerage is amortized over 3 years. The
            unamortized portion of the brokerage is carried forward as prepaid expense. Any other brokerage is expense out
            in the year in which they are incurred.

      5.9   Fund raising expenses

            Axis Private Equity Ltd.

            The Company follows the practice of recovering expenses incurred towards fund raising on behalf of Axis
            Infrastructure Fund, as per the practice followed in the private equity industry. Such expenses are recovered
            from the Fund after the fund raising exercise is completed and the Fund is established. However, the Company
            accounts such expenses in its books, in case the fund raising exercise is abandoned.




128
5.10 Fixed assets and depreciation

     Group

     Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes
     freight, duties, taxes and incidental expenses related to the acquisition and installation of the asset.

     Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes
     advances paid to acquire fixed assets.

     Depreciation is provided on the straight-line method from the date of addition. The rates of depreciation prescribed
     in Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If the Management’s
     estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life
     on a subsequent review is shorter, then depreciation is provided at a higher rate based on the Management’s
     estimate of the useful life/remaining useful life. Pursuant to this policy, depreciation has been provided using the
     following estimated useful life:

     asset                                                                                         estimated useful life
     Owned premises                                                                                              61 years
     Assets given on operating lease                                                                             20 years
     Computer hardware including printers                                                                         3 years
     Application software                                                                                         5 years
     Vehicles                                                                                                     4 years
     EPABX, telephone instruments                                                                                 8 years
     CCTV and video conferencing equipment                                                                        3 years
     Mobile phone                                                                                                 2 years
     Locker cabinets/cash safe/strong room door                                                                  16 years
     Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment                                     5 years
     UPS, VSAT, fax machines                                                                                      5 years
     Cheque book/cheque encoder, currency counting machine, fake note detector                                    5 years
     Assets at staff residence                                                                                    3 years
     All other fixed assets                                                                                      10 years

     All fixed assets individually costing less than `5,000 are fully depreciated in the year of installation.

     Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till
     the date of sale.

     The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
     impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount
     of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling
     price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present
     value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying
     amount of the asset over its remaining useful life.

     Axis Bank Ltd.

     Profit on sale of premises is appropriated to Capital Reserve Account in accordance with RBI instructions

5.11 Lease transactions

     Axis Bank Ltd.

     Assets given on operating lease are capitalised at cost. Rentals received by the Bank are recognised in the Profit
     and Loss Account on accrual basis.




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           Group

           Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease
           term are classified as operating lease. Lease payments for assets taken on operating lease are recognised as an
           expense in the Profit and Loss Account on a straight-line basis over the lease term.

      5.12 Retirement and other employee benefits

           Provident fund

           Axis Bank Ltd.

           Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged
           to the Profit and Loss Account of the year when the contributions to the fund are due. Further, an actuarial
           valuation is conducted by an independent actuary to determine the deficiency, if any, in the interest payable on
           the contributions as compared to the interest liability as per the statutory rate.

           subsidiaries

           Contributions to a recognised Provident Fund scheme, which is a defined contribution scheme are accounted for
           on an accrual basis and charged to Profit and Loss Account.

           Gratuity

           Axis Bank Ltd.

           The Bank contributes towards gratuity fund (defined benefit retirement plan) administered by the Life Insurance
           Corporation of India (‘LIC’), Metlife Insurance Company Limited (‘Metlife’), HDFC Standard Life Insurance
           Company Limited (‘HDFC Life’), ICICI Prudential Life Insurance Company Limited (‘ICICI Pru’) and Bajaj Life
           Insurance Company Limited (‘BLIC’) for eligible employees. Under this scheme, the settlement obligations
           remain with the Bank, although LIC/Metlife/HDFC Life/ICICI Pru/BLIC administer the scheme and determine
           the contribution premium required to be paid by the Bank. The plan provides a lump sum payment to vested
           employees at retirement or termination of employment based on the respective employee’s salary and the years
           of employment with the Bank. Liability with regard to gratuity fund is accrued based on actuarial valuation
           conducted by an independent actuary using the Projected Unit Credit Method as at 31 March each year.

           Axis Securities and Sales Ltd. and Axis Asset Management Company Ltd.

           Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation using
           Projected Unit Credit Method made at the end of each financial year.

           Actuarial gains/losses are immediately taken to the Profit and Loss Account and are not deferred.

           Axis Trustee Services Ltd.

           Gratuity liability is computed and accrued by the Company in accordance with Payment of Gratuity Act, 1972.

           Leave encashment

           Group

           Short term compensated absences are provided for based on estimates. The Group provides leave encashment
           benefit (long term), which is a defined benefit scheme based on actuarial valuation conducted by an independent
           actuary. The actuarial valuation is carried out as per the Projected Unit Credit Method as at 31 March each year.

           superannuation

           Axis Bank Ltd.
           Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either
           under a cash-out option through salary or under a defined contribution plan. Through the defined contribution
           plan the Bank contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC,



130
     which undertakes to pay the lump sum and annuity benefit payments pursuant to the scheme. Superannuation
     contributions are recognised in the Profit and Loss Account in the period in which they accrue.

     Actuarial gains/losses are immediately taken to Profit and Loss Account and are not deferred.

5.13 Debit/Credit card reward points

     Axis Bank Ltd.

     The Bank estimates the probable redemption of debit and credit card reward points using an actuarial method at
     the Balance Sheet date by employing an independent actuary. Provision for the said reward points is then made
     based on the actuarial valuation report as furnished by the said independent actuary.

5.14 Taxation

     Group

     Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are
     determined in accordance with the Income tax Act, 1961. Deferred income taxes reflect the impact of current
     year timing differences between taxable income and accounting income for the year and reversal of timing
     differences of earlier years.

     Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance
     Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
     current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the
     taxes on income levied by same governing taxation laws.

     Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future
     taxable income will be available against which such deferred tax assets can be realised. The impact of changes
     in the deferred tax assets and liabilities is recognised in the Profit and Loss Account.

     Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s
     judgement as to whether realisation is considered as reasonably certain. Deferred tax assets are recognised on
     carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax
     asset can be realised against future profits.

5.15 Share issue expenses

     Axis Bank Ltd.

     Share issue expenses are adjusted from Share Premium Account in terms of Section 78 of the Companies Act,
     1956.

5.16 Earnings per share

     The Group reports basic and diluted earnings per share in accordance with AS 20, Earnings per Share, as notified
     by the Companies (Accounting Standards) Rules, 2006. Basic earnings per share is computed by dividing the net
     profit after tax by the weighted average number of equity shares outstanding for the year.

     Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue
     equity shares were exercised or converted during the year. Diluted earnings per share is computed using the
     weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

5.17 Employee stock option scheme

     Axis Bank Ltd.

     The 2001 Employee Stock Option Scheme (‘the Scheme’) provides for grant of stock options on equity shares
     of the Bank to employees and Directors of the Bank and its subsidiaries. The Scheme is in accordance with the
     Securities and Exchange Board of India (SEBI) (Employees Stock Option Scheme and Employee Stock Purchase
     Scheme) Guidelines, 1999. The Bank follows the intrinsic value method to account for its stock based employee



                                                                                                                       131
               compensation plans as per the Guidance Note on ‘Accounting for Employee Share-based Payments’ issued
               by the ICAI. Options are granted at an exercise price, which is equal to/less than the fair market price of the
               underlying equity shares. The excess of such fair market price over the exercise price of the options as at the
               grant date is recognised as a deferred compensation cost and amortised on a straight-line basis over the vesting
               period of such options.

               The fair market price is the latest available closing price, prior to the date of the grant, on the stock exchange on
               which the shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock
               exchange where there is highest trading volume on the said date is considered.

          5.18 Provisions, contingent liabilities and contingent assets

               Group

               A provision is recognised when the Group has a present obligation as a result of past event where it is probable
               that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can
               be made. Provisions are not discounted to its present value and are determined based on best estimate required
               to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted
               to reflect the current best estimates.

               A disclosure of contingent liability is made when there is:

	         	    •	   a	possible	obligation	arising	from	a	past	event,	the	existence	of	which	will	be	confirmed		by	occurrence	or	
                    non occurrence of one or more uncertain future events not within the control of the Group; or

	         	    •	   a	present	obligation	arising	from	a	past	event	which	is	not	recognised	as	it	is	not	probable	that	an	outflow	
                    of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation
                    cannot be made.

               When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of
               resources is remote, no provision or disclosure is made.

               Contingent assets are not recognised in the financial statements. However, contingent assets are assessed
               continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income
               are recognised in the period in which the change occurs.




    132
18      notes forming part of the consolidated financial statements for the year ended
        31 march, 2012
        (Currency: In Indian Rupees)
1       a)   On 17 November, 2010, the Board of Directors of the Bank had approved the acquisition of certain financial
             services businesses undertaken by Enam Securities Private Limited (ESPL) directly and through its wholly owned
             subsidaires, by Axis Securities and Sales Limited (ASSL), a wholly owned subsidiary of the Basnk by way of a
             demerger. However, pursuant to conditions prescribed by the Reserve Bank of India, certain modifications have
             been carried out to the demerger structure in terms of a revised Scheme of Arrangement under Sections 391-
             394 and other relevant provisions of the Companies Act, 1956. Accordingly, the acquisition will now comprise
             of (a) a demerger of the financial services businesses from ESPL to the Bank, in consideration of which the Bank
             will issue shares to the shareholders of ESPL, and (b) immediately upon completion of the demerger under the
             Scheme, a simultaneous sale of the financial services businesses will be undertaken from the Bank to ASSL for a
             cash consideration, with both the aforesaid steps occurring simultaneously. The Reserve Bank of India has on 30
             March, 2012, conveyed its no objection to the Scheme. Further, on 27 April, 2012, the Board of Directors of the
             Bank have approved the reassessment of the valuation of the ESPL business at `1,396 crores and consequently, in
             consideration for the demerger of the financial services business of ESPL, the Bank will issue shares in the ratio of 5
             Equity shares of the Bank (aggregating 12,090,000 equity shares) of the face value of `10 each for every 1 equity
             share (aggregating 2,418,000 equity shares) of `10 each held by the shareholders of ESPL. The sale of the financial
             services businesses will be simultaneously undertaken from the Bank to ASSL for a cash consideration of `274
             crores only. The appointed date under the Scheme is 1 April, 2010, and the parties shall proceed with filing the
             Revised Scheme and other necessary documents with the relevant High Courts and other regulatory authorities
             for their approval.

        b)   The Board of Directors of the Bank have, on 27 April, 2012, approved a proposal to induct Schroder Singapore
             Holdings Private Limited, a wholly owned subsidiary of Schroders plc, as a 25% shareholder in Axis Asset
             Management Company Ltd., a wholly subsidiary of the Bank. The transaction is subject to regulatory approvals.

2       other disclosures

2.1.1   ‘Provisions and contingencies’ recognised in the Profit and Loss Account includes:
                                                                                                                       (` in crores)
        for the year ended                                                                 31 march, 2012         31 March, 2011
        Provision for income tax
        - Current tax for the year                                                                 2,262.05               1,958.34
        - Deferred tax for the year                                                                (210.57)                (205.48)
        Provision for fringe benefit tax                                                                    -                (0.34)
                                                                                                   2,051.48               1,752.52
        Provision for wealth tax                                                                        0.36                   0.46
        Provision for interest tax                                                                          -                  0.29
        Provision for non-performing assets
        (including bad debts written off and write backs)                                            860.43                 955.12
        Provision for restructured assets                                                             88.86                  15.06
        Provision towards standard assets                                                            150.30                 166.16
        Provision for depreciation in value of investments                                            58.10                  99.27
        Provision for country risk                                                                      4.81                   2.45
        Provision for other contingencies                                                           (19.83)                  41.22
        Total                                                                                      3,194.51               3,032.55




                                                                                                                             133
2.1.2   During the year ended 31 March, 2012, the Bank has raised subordinated debt of `3,425 crores, the details of which
        are set out below:

        date of allotment                              Period                    coupon                                 amount
        1 December, 2011                               120 months                9.73%                          `1,500.00 crores
        20 March, 2012                                 120 months                9.30%                          `1,925.00 crores

        The Bank has not raised any subordinated debt during the year ended 31 March, 2011.

        During the year ended 31 March, 2012, the Bank redeemed subordinated debt of `5 crores, the details of which are
        set out below:
        date of maturity                                Period                   coupon                                 amount
        26 April, 2011                                  93 months                6.70%                               `5.00 crores
        During the year ended 31 March, 2011, the Bank redeemed subordinated debt of `155 crores, the details of which are
        set out below:

        date of maturity                                Period                    coupon                              amount
        4 June, 2010                                    72 months                 5.75%                          `150.00 crores
        20 June, 2010                                   93 months                 9.05%                            `5.00 crores
2.1.3   The Bank has not raised any hybrid capital during the year ended 31 March, 2012 and year ended 31 March, 2011.

2.1.4   Earnings Per Share (‘EPS’)

        The details of EPS computation is set out below:
        as at                                                                                31 march, 2012      31 March, 2011
        Basic and Diluted earnings for the year (Net profit after tax) (` in crores)                 4,219.78           3,339.91
        Basic weighted average no. of shares (in crores)                                                41.21              40.85
        Add: Equity shares for no consideration arising on grant of stock options under
        ESOP (in crores)                                                                                 0.30                0.67
        Diluted weighted average no. of shares (in crores)                                              41.51              41.52
        Basic EPS (`)                                                                                  102.40              81.77
        Diluted EPS (`)                                                                                101.66              80.44
        Nominal value of shares (`)                                                                     10.00              10.00

        Dilution of equity is on account of 2,991,727 stock options (previous year 6,721,352)

2.1.5   Employee Stock Options Scheme (‘the Scheme’)

        In February 2001, pursuant to the approval of the shareholders at the Extraordinary General Meeting, the Bank
        approved an Employee Stock Option Scheme. Under the Scheme, the Bank is authorised to issue upto 13,000,000
        equity shares to eligible employees. Eligible employees are granted an option to purchase shares subject to vesting
        conditions. The options vest in a graded manner over 3 years. The options can be exercised within 3 years from the
        date of the vesting. Further, over the period June 2004 to June 2010, pursuant to the approval of the shareholders at
        Annual General Meetings, the Bank approved an ESOP scheme for additional options aggregating 27,517,400. Within
        the overall ceiling of 40,517,400 stock options approved for grant by the shareholders as stated earlier, the Bank is also
        authorised to issue options to employees and directors of the subsidiary companies.

        36,622,890 options have been granted under the Scheme till the previous year ended 31 March, 2011.




 134
On 22 April, 2011, the Bank granted 3,096,500 stock options (each option representing entitlement to one equity
share of the Bank) to its employees including the MD & CEO and 172,200 stock options to employees of Axis Asset
Management Company Limited, a subsidiary of the Bank. These options can be exercised at a price of `1,447.55 per
option.

Stock option activity under the Scheme for the year ended 31 March, 2012 is set out below:

                                                                                    Weighted Weighted average
                                                 options       range of exercise     average        remaining
                                             outstanding               prices (`)    exercise  contractual life
                                                                                     price (`)         (Years)
Outstanding at the beginning of the year       11,122,518     232.10 to 1,245.45       712.90             2.86
Granted during the year                         3,268,700               1,447.55     1,447.55                 -
Forfeited during the year                        (243,596)    232.10 to 1,447.55       960.75                 -
Expired during the year                            (61,265)     232.10 to 468.90       406.46                 -
Exercised during the year                      (2,658,109)    232.10 to 1,159.30       512.92                 -
Outstanding at the end of the year              11,428,248    319.00 to 1,447.55       965.90             2.79
Exercisable at the end of the year               4,983,892    319.00 to 1,245.45       717.76             1.53

The weighted average share price in respect of options exercised during the year was `1,200.12.

Stock option activity under the Scheme for the year ended 31 March, 2011 is set out below:

                                                                                    Weighted Weighted average
                                               options        range of exercise      average        remaining
                                           outstanding                prices (`)     exercise  contractual life
                                                                                     price (`)         (Years)
Outstanding at the beginning of the year     13,897,518        97.62 to 907.25         514.27             2.87
Granted during the year                       2,915,200    1,159.30 to 1,245.45      1,163.05                 -
Forfeited during the year                      (295,348)    232.10 to 1,214.80         658.88                 -
Expired during the year                         (23,128)         97.62 to 319.00       264.72                   -
Exercised during the year                    (5,371,724)         97.62 to 824.40       448.22                 -
Outstanding at the end of the year           11,122,518       232.10 to 1,245.45       712.90              2.86
Exercisable at the end of the year             4,479,300       232.10 to 907.25        525.53              1.49
The weighted average share price in respect of options exercised during the year was `1,324.47.

Fair Value Methodology

Applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’ the
impact on reported net profit and EPS would be as follows:

                                                                             31 march, 2012       31 March, 2011
net Profit (as reported) (` in crores)                                               4,219.78           3,339.91
Add: Stock based employee compensation expense included in net
      income (` in crores)                                                                   -                  -
Less: Stock based employee compensation expense determined
      under fair value based method (proforma) (` in crores)                         (147.16)           (107.97)
net Profit (Proforma) (` in crores)                                                  4,072.62           3,231.94




                                                                                                          135
                                                                                           31 march, 2012         31 March, 2011
        earnings per share: Basic (in `)
        As reported                                                                                  102.40                  81.77
        Proforma                                                                                      98.83                  79.12
        earnings per share: diluted (in `)
        As reported                                                                                  101.66                  80.44
        Proforma                                                                                      98.11                  77.84
        The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with
        the following assumptions:

                                                                                        31 march, 2012            31 March, 2011
        Dividend yield                                                                         1.23%             1.24% to 1.32%
        Expected life                                                                       2-4 years                   2-4 years
        Risk free interest rate                                                       8.05% to 8.10%             5.98% to 7.17%
        Volatility                                                                  39.43% to 53.33%           54.72% to 61.66%
        Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period.
        The measure of volatility used in the Black-Scholes options pricing model is the annualized standard deviation of the
        continuously compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility
        of the stock prices on the National Stock Exchange, over a period prior to the date of grant, corresponding with the
        expected life of the options has been considered.
        The weighted average fair value of options granted during the year ended 31 March, 2012 is `559.31 (previous year
        `485.98).
2.1.6   Dividend paid on shares issued on exercise of stock options
        The Bank may allot shares between the Balance Sheet date and record date for the declaration of dividend pursuant to
        the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31 March,
        2012, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in
        the current year.
        Appropriation to proposed dividend during the year ended 31 March, 2012 includes dividend of `1.88 crores (previous
        year `2.47 crores) paid pursuant to exercise of 1,153,890 employee stock options after the previous year end but
        before the record date for declaration of dividend for the year ended 31 March, 2011.
2.1.7   Segmental reporting
        The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking, and
        Other Banking Business. These segments have been identified and based on RBI’s revised guidelines on Segment
        Reporting issued on 18 April 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The principal activities of
        these segments are as under.
        segment                        Principal activities
        Treasury                       Treasury operations include investments in sovereign and corporate debt, equity and
                                       mutual funds, trading operations, derivative trading and foreign exchange operations on
                                       the proprietary account and for customers and central funding.
        Retail Banking                 Constitutes lending to individuals/small businesses subject to the orientation, product
                                       and granularity criterion and also includes low value individual exposures not exceeding
                                       the threshold limit of `5 crores as defined by RBI. Retail Banking activities also include
                                       liability products, card services, internet banking, ATM services, depository, financial
                                       advisory services and NRI services.
        Corporate/Wholesale            Includes corporate relationships not included under Retail Banking, corporate advisory
        Banking                        services, placements and syndication, management of public issue, project appraisals,
                                       capital market related services and cash management services.
        Other Banking Business         Includes para banking activities like third party product distribution and other banking
                                       transactions not covered under any of the above three segments.



 136
The operations of Axis Securities and Sales Ltd. and Axis Trustee Services Ltd. have been classified under the ‘Retail
Banking’ and ‘Corporate/Wholesale Banking’ segments respectively.

The operations of Axis Private Equity Ltd., Axis Asset Management Company Ltd. and Axis Mutual Fund Trustee Ltd.
have been classified under the ‘Other Banking Business’ segment.

Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and interest
income on the investment portfolio. The principal expenses of the segment consist of interest expense on funds
borrowed from external sources and other internal segments, premises expenses, personnel costs, other direct
overheads and allocated expenses.

Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given to customers
falling under this segment and fees arising from transaction services and merchant banking activities such as syndication
and debenture trusteeship. Revenues of the Retail Banking segment are derived from interest earned on loans classified
under this segment and fees for banking and advisory services, ATM interchange fees and cards products. Expenses of
the Corporate/Wholesale Banking and Retail Banking segments primarily comprise interest expense on deposits and
funds borrowed from other internal segments, infrastructure and premises expenses for operating the branch network
and other delivery channels, personnel costs, other direct overheads and allocated expenses.

Segment income includes earnings from external customers and from funds transferred to the other segments.
Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any, for that
segment. Segment-wise income and expenses include certain allocations. Inter segment interest income and interest
expense represent the transfer price received from and paid to the Central Funding Unit (CFU) respectively. For this
purpose, the funds transfer pricing mechanism presently followed by the Bank, which is based on historical matched
maturity and market-linked benchmarks, has been used. Operating expenses other than those directly attributable to
segments are allocated to the segments based on an activity-based costing methodology. All activities in the Bank are
segregated segment-wise and allocated to the respective segment.




                                                                                                                  137
      Segmental results are set out below:
                                                                                                         (` in crores)
                                                                             31 march, 2012
                                                          Treasury corporate/        retail     other           Total
                                                                   Wholesale       Banking    Banking
                                                                     Banking                  Business
      segment revenue
      Gross interest income (external customers)           5,992.51   11,292.20    4,710.06       0.13    21,994.90
      Other income                                         1,002.54    2,814.12    1,253.31    417.22       5,487.19
      Total income as per Profit and Loss account          6,995.05   14,106.32    5,963.37    417.35      27,482.09
      Add/(less) inter segment interest income            28,992.40    3,093.62    7,274.96       0.15     39,361.13
      Total segment revenue                               35,987.45   17,199.94   13,238.33    417.50      66,843.22
      Less: Interest expense (external customers)          8,747.14     214.71     5,007.33          -     13,969.18
      Less: Inter segment interest expense                25,817.89    9,335.77    4,207.43       0.04     39,361.13
      Less: Operating expenses                              426.36     1,734.11    3,793.66    145.76       6,099.89
      operating profit                                      996.06     5,915.35     229.91     271.70       7,413.02
      Less: Provision for non performing assets/Others      160.78      735.59      246.30        0.36      1,143.03
      segment result                                        835.28     5,179.76     (16.39)    271.34       6,269.99
      Less: Provision for Tax                                                                               2,051.48
      Add: Share of Profit in Associate                                                                          1.27
      Extraordinary profit/loss                                                                                      -
      net Profit                                                                                            4,219.78
      Segment assets                                     108,080.13 117,651.99    58,282.48    232.91 284,247.51
      Unallocated assets                                                                                    1,169.00
      Total assets                                                                                       285,416.51
      Segment liabilities                                116,445.51   51,260.24   94,207.91      33.40 261,947.06
      Unallocated liabilities                                                                                 787.74
      Total liabilities                                                                                  262,734.80
      net assets                                         (8,365.38)   66,391.75 (35,925.43)    199.51      22,681.71
      capital expenditure for the year                        20.30      97.08      215.00        7.33        339.71
      depreciation on fixed assets for the year               20.67      98.77      220.80        7.91        348.15




138
                                                                                                      (` in crores)
                                                                       31 march, 2011
                                                      Treasury corporate/         retail   other             Total
                                                               Wholesale        Banking Banking
                                                                 Banking                 Business
segment revenue
Gross interest income (external customers)            4,751.66   7,082.97       3,320.18     0.05      15,154.86
Other income                                          1,122.26   2,297.85        991.52    259.82       4,671.45
Total income as per Profit and Loss account           5,873.92   9,380.82       4,311.70   259.87      19,826.31
Add/(less) inter segment interest income             18,542.03   2,378.68       5,015.45     0.48      25,936.64
Total segment revenue                                24,415.95 11,759.50        9,327.15   260.35      45,762.95
Less: Interest expense (external customers)           5,327.18     147.61       3,112.17     1.65       8,588.61
Less: Inter segment interest expense                 17,832.24   5,554.07       2,550.33          -    25,936.64
Less: Operating expenses                                384.54   1,437.94       2,874.38   163.61       4,860.47
operating profit                                        871.99   4,619.88        790.27     95.09       6,377.23
Less: Provision for non performing assets/Others        140.53     725.89        412.86      0.75       1,280.03
segment result                                          731.46   3,893.99        377.41     94.34       5,097.20
Less: Provision for Tax                                                                                 1,752.52
Less: Share of Loss in Associate                                                                             4.77
Extraordinary profit/ loss                                                                                        -
net Profit                                                                                              3,339.91
Segment assets                                       94,250.01 104,305.24      42,917.49   223.61 241,696.35
Unallocated assets                                                                                        870.30
Total assets                                                                                          242,566.65
Segment liabilities                                 105,392.46 46,462.76       71,038.40    38.42 222,932.04
Unallocated liabilities                                                                                   740.00
Total liabilities                                                                                     223,672.04
net assets                                          (11,142.45) 57,842.48 (28,120.91)      185.19      18,894.61
capital expenditure for the year                         41.95     468.46        869.50     25.64       1,405.55
depreciation charged on fixed assets for the year         8.71      97.27        180.26      7.45          293.69

Geographic Segments
                                                                                                      (` in crores)
                          domestic                    international                       Total
                      31 march,    31 March,       31 march,       31 March,        31 march,          31 March,
                          2012         2011             2012           2011             2012               2011
Revenue                25,854.07       18,718.24     1,628.02      1,108.07         27,482.09          19,826.31
Assets                253,105.72    218,939.58      32,310.79     23,627.07        285,416.51         242,566.65




                                                                                                            139
2.1.8     Related party disclosure

          The related parties of the Bank are broadly classified as:

          a)   Promoters

               The Bank has identified the following entities as its Promoters.

	         	    •	    Administrator	of	the	Specified	Undertaking	of	the	Unit	Trust	of	India	(UTI-1)	

	         	    •	    Life	Insurance	Corporation	of	India	(LIC)

	         	    •	    General	 Insurance	 Corporation	 and	 four	 Government-owned	 general	 insurance	 companies	 -	 New	 India	
                     Assurance Co. Ltd., National Insurance Co. Ltd., United India Insurance Co. Ltd. and The Oriental Insurance
                     Co. Ltd.

          b)   Key Management Personnel

	         	    •	   Mrs.	Shikha	Sharma	(Managing	Director	&	Chief	Executive	Officer)	

	         	    •	   Mr.	Sisir	Kumar	Chakrabarti	(Deputy	Managing	Director)	upto	30	September,	2011.

          c)   Relatives of Key Management Personnel

               Mr. Sanjaya Sharma, Mrs. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr. Prashant
               Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Mrs. Swapna Chakraborty, Mr. Hirendra Nath Chakraborty,
               Mr. Rajat Chakraborty, Mrs. Devikalpa Chakraborty (Kundu), Master Ahan Chakraborty, Mr. Nabakumar
               Chakraborty, Mr. Prabir Chakraborty, Mrs. Minati Chakraborty, Mrs. Krishna Chakraborty, Mrs. Sipra Chakraborty,
               Mrs. Shikha Bhattacharya, Ms. Shila Chakraborty, Mr. Asim Kumar Chakraborty, Mr. Arunabha Bhattacharya.

          d)   Associate
	         	    •	    Bussan	Auto	Finance	India	Private	Limited

                     Based on RBI guidelines, details of transactions with Associates are not disclosed since there is only one
                     entity/party in this category. [Refer Schedule 17(2)].




    140
The details of transactions of the Bank with its related parties during the year ended 31 March, 2012 are given below:
                                                                                                           (` in crores)
items/related Party                                    Promoters              key relatives of key                   Total
                                                                      management    management
                                                                        Personnel        Personnel
Dividend paid                                              214.22           0.06                 -                 214.28
Dividend received                                               -              -                 -                      -
Interest paid                                              540.45           0.01              0.03                 540.49
Interest received                                            0.02           0.01                 -                   0.03
Investment of the Bank                                          -              -                 -                      -
Investment of related party in the Bank                         -           1.84                 -                   1.84
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                                  -                -                        -            -
Redemption of Subordinated Debt                                  -                -                        -            -
Purchase of investments                                          -                -                        -            -
Sale of investments                                         244.81                -                        -       244.81
Management contracts                                             -             5.51                        -         5.51
Contribution to employee benefit fund                        13.75                -                        -        13.75
Purchase of fixed assets                                         -                -                        -            -
Sale of fixed assets                                             -                -                        -            -
Non-funded commitments                                           -                -                        -            -
Advance granted (net)                                         0.64                -                        -         0.64
Advance repaid                                                   -             0.03                        -         0.03
Receiving of services                                        51.49                -                        -        51.49
Rendering of services                                         1.65                -                        -         1.65
Other reimbursements from related party                          -                -                        -            -
Other reimbursements to related party                         1.02                -                        -         1.02

The balances payable to/receivable from the related parties of the Bank as on 31 March, 2012 are given below:

                                                                                                               (` in crores)
items/related Party                                    Promoters            key        relatives of key              Total
                                                                     management          management
                                                                       Personnel              Personnel
Borrowings from the Bank                                        -              -                      -                 -
Deposits with the Bank                                   5,693.55           0.31                   0.26          5,694.12
Placement of deposits                                        0.16              -                      -              0.16
Advances                                                    43.65           0.24                      -             43.89
Investment of the Bank                                          -              -                      -                 -
Investment of related party in the Bank                    154.44           0.02                      -            154.46
Non-funded commitments                                       3.01              -                      -              3.01
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                          2,837.30                  -                   -         2,837.30
Advance for rendering of services                               -                  -                   -                -
Other receivables                                               -                  -                   -                -
Other payables                                                  -                  -                   -                -




                                                                                                                     141
      The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
      2012 are given below:
                                                                                                           (` in crores)

      items/related Party                                   Promoters             key relatives of key                      Total
                                                                           management   management
                                                                             Personnel       Personnel
      Borrowings from the Bank                                         -                 -                    -                   -
      Deposits with the Bank                                  5,693.55               1.24                 2.70          5,697.49
      Placement of deposits                                        0.16                  -                    -                0.16
      Advances                                                    48.22              0.27                     -            48.49
      Investment of the Bank                                           -                 -                    -                   -
      Investment of related party in the Bank                   155.12               0.05                     -           155.17
      Non-funded commitments                                       3.01                  -                    -                3.01
      Investment of related party in Subordinated
      Debt/Hybrid Capital of the Bank                         2,837.30                   -                    -         2,837.30
      Other receivables                                                -                 -                    -                   -
      Other payables                                                   -                 -                    -                   -


      The details of transactions of the Bank with its related parties during the year ended 31 March, 2011 are given below:

                                                                                                                     (` in crores)
      items/related Party                                   Promoters             key relatives of key                      Total
                                                                           management   management
                                                                             Personnel       Personnel
      Dividend Paid                                             184.65            0.03               -                    184.68
      Interest Paid                                             389.65            0.07            0.04                    389.76
      Interest Received                                           0.22            0.02               -                      0.24
      Investment of related party in the Bank                        -            2.28               -                      2.28
      Investment of related party in Subordinated
      Debt/Hybrid Capital of the Bank                                -                  -                     -                -
      Redemption of Subordinated Debt                                -                  -                     -                -
      Purchase of investments                                    10.24                  -                     -            10.24
      Sale of investments                                       563.21                  -                     -           563.21
      Management contracts                                           -              5.46*                     -             5.46
      Contribution to employee benefit fund                      15.22                  -                     -            15.22
      Purchase of fixed assets                                       -                  -                     -                -
      Sale of fixed assets                                           -                  -                     -                -
      Non-funded commitments                                      0.01                  -                     -             0.01
      Advance granted (net)                                          -                  -                     -                -
      Advance repaid                                                 -               0.12                     -             0.12
      Receiving of services                                      30.18                  -                     -            30.18
      Rendering of services                                       2.51                  -                     -             2.51
      Other reimbursements to related party                       0.15                  -                     -             0.15
      *includes `0.70 crore subject to approval of Shareholders




142
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2011 are given below:

                                                                                                       (` in crores)

items/related Party                             Promoters             key       relatives of key                Total
                                                               management         management
                                                                 Personnel             Personnel
Borrowings from the Bank                                   -               -                    -                   -
Deposits with the Bank                            4,716.08              0.23                0.23         4,716.54
Placement of deposits                                  0.16                -                    -               0.16
Advances                                              43.00            0.27                     -           43.27
Investment of related party in the Bank             152.78             0.04                     -          152.82
Non-funded commitments                                 3.01                -                    -               3.01
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                   2,825.00                 -                    -        2,825.00
Advance for rendering of services                          -               -                    -                   -
Other receivables                                          -               -                    -                   -
Other payables                                             -               -                    -                   -

The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
2011 are given below:
                                                                                                       (` in crores)

items/related Party                             Promoters             key       relatives of key                Total
                                                               management         management
                                                                 Personnel             Personnel
Borrowings from the Bank                                  -                 -                   -                   -
Deposits with the Bank                            4,716.09              3.94                4.96         4,724.99
Placement of deposits                                  0.16                 -                   -               0.16
Advances                                            132.47              0.39                    -          132.86
Investment of related party in the Bank             156.15              0.04                    -          156.19
Non-funded commitments                               39.00                  -                   -           39.00
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank                   2,825.00                  -                   -        2,825.00
Advance for rendering of services                         -                 -                   -                   -
Other receivables                                         -                 -                   -                   -
Other payables                                            -                 -                   -                   -




                                                                                                                143
2.1.9   Leases

        Disclosure in respect of assets given on operating lease

        The Group has not given any asset on operating lease.

        Disclosure in respect of assets taken on operating lease

        Operating lease comprises leasing of office premises/ATMs, staff quarters, electronic data capturing machines and IT
        equipment.
                                                                                                                (` in crores)
                                                                                  31 march, 2012              31 March, 2011
        Future lease rentals payable as at the end of the year:
        - Not later than one year                                                           472.07                     445.04
        - Later than one year and not later than five years                                1,631.77                  1,240.33
        - Later than five years                                                             479.08                     673.79
        Total of minimum lease payments recognised in the Profit and Loss
        Account for the year                                                                570.43                     571.11

        There are no provisions relating to contingent rent.

        The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.

        There are no undue restrictions or onerous clauses in the agreements.

2.1.10 Other Fixed Assets (including furniture & fixtures)

        The movement in fixed assets capitalized as application software is given below:
                                                                                                                   (` in crores)
        Particulars                                                                 31 march, 2012            31 March, 2011
        At cost at the beginning of the year                                                  341.11                   268.73
        Additions during the year                                                              58.64                     74.06
        Deductions during the year                                                             (8.41)                    (1.68)
        Accumulated depreciation as at 31 March                                             (262.11)                  (209.85)
        Closing balance as at 31 March                                                        129.23                   131.26
        Depreciation charge for the year                                                       57.32                     47.91

2.1.11 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:
                                                                                                                   (` in crores)
        as at                                                                       31 march, 2012            31 March, 2011
        Deferred tax assets on account of provisions for doubtful debts                       743.17                   574.23
        Deferred tax assets on account of amortization of HTM investments                     184.09                   164.04
        Deferred tax assets on account of provision for employee benefits                      82.60                     70.67
        Deferred tax liability on account of depreciation on fixed assets                    (23.07)                   (32.66)
        Deferred tax assets on account of other contingencies                                   6.94                     13.37
        Other deferred tax assets                                                              33.71                     27.22
        net deferred tax asset                                                              1,027.44                   816.87




 144
2.1.12 Employee Benefits
       Group
       Provident fund
       The contribution to the employee’s provident fund of the Group amounted to `71.81 crores for the year ended 31
       March, 2012 (previous year `44.94 crores)
       Axis Bank Ltd.
       The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay
       interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’
       Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the
       deficiency shall be made good by the Bank. Based on an actuarial valuation conducted by an independent actuary,
       there is no deficiency as at the Balance Sheet date for the Bank. The principal assumptions used by the actuary are as
       under.

                                                                                                            31 march, 2012
       Discount rate for the term of the obligation                                                                 8.35%
       Average historic yield on the investment portfolio                                                           9.09%
       Discount rate for the remaining term to maturity of the investment portfolio                                 8.45%
       Expected investment return                                                                                   8.99%
       Guaranteed rate of return                                                                                    8.25%
       superannuation
       The Bank contributed `14.07 crores to the employee’s superannuation plan for the year ended 31 March, 2012
       (previous year `10.17 crores).
       Group
       Leave encashment
       The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the
       Group is given below.
                                                                                                             (` in crores)
                                                                                as at 31 march, 2012
                                                                                 axis securities and           axis Trustee
                                                             axis Bank Ltd.             sales Limited         services Ltd.
       Privileged leave                                             252.40                       0.12                    -*
       Sick leave                                                    20.26                          -                     -
       Total actuarial liability                                    272.66                       0.12                    -*
       assumptions
       Discount rate                                             8.35% p.a.                 9.20% p.a.                   N.A.
       Salary escalation rate                                    6.00% p.a.                 6.00% p.a.                   N.A.
       *amount less than `50,000
                                                                                                                 (` in crores)
                                                                                as at 31 march, 2011
                                                                                 axis securities and           axis Trustee
                                                             axis Bank Ltd.             sales Limited         services Ltd.
       Privileged leave                                             217.41                       0.08                  0.01
       Sick leave                                                    18.56                          -                     -
       Total actuarial liability                                    235.97                       0.08                  0.01
       assumptions
       Discount rate                                             8.05% p.a.                 7.80% p.a.                   N.A.
       Salary escalation rate                                    6.00% p.a.                 6.00% p.a.                   N.A.



                                                                                                                       145
      Group

      Gratuity
      The following tables summarize the components of net benefit expenses recognised in the Profit and Loss Account and
      the funded status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.

      Profit and Loss Account

      Net employee benefit expenses (recognised in payments to and provisions for employees)
                                                                                                             (` in crores)

                                                                                 31 march, 2012          31 March, 2011
      Current Service Cost                                                                12.03                     9.46
      Interest on Defined Benefit Obligation                                               5.56                     3.90
      Expected Return on Plan Assets                                                      (4.85)                   (3.36)
      Net Actuarial Losses/(Gains) recognised in the year                                 23.91                     0.45
      Past Service Cost                                                                   (3.72)                    8.82
      Total included in “employee Benefit expense”                                        32.93                    19.27
      Actual Return on Plan Assets                                                         5.31                     2.58

      Balance Sheet

      Details of provision for gratuity
                                                                                                             (` in crores)

                                                                                 31 march, 2012          31 March, 2011
      Present Value of Funded Obligations                                               (94.82)                  (61.43)
      Fair Value of Plan Assets                                                           98.21                    63.62
      net asset/(Liability)                                                                3.39                     2.19
      amounts in Balance sheet
      Liabilities                                                                         (1.12)                   (0.59)
      Assets                                                                               4.51                     2.78
      net asset/(Liability)                                                                3.39                     2.19

      Changes in the present value of the defined benefit obligation are as follows:
                                                                                                             (` in crores)

                                                                                 31 march, 2012          31 March, 2011
      change in defined Benefit obligation
      opening defined Benefit obligation                                                  61.42                    43.02
      Current Service Cost                                                                12.03                     9.46
      Interest Cost                                                                        5.56                     3.90
      Actuarial Losses/(Gains)                                                            24.39                    (0.34)
      Past Service Cost                                                                   (3.72)                    8.82
      Benefits Paid                                                                       (4.85)                   (3.43)
      closing defined Benefit obligation                                                  94.83                    61.43




146
Changes in the fair value of plan assets are as follows:
                                                                                                              (` in crores)

                                                                            31 march, 2012               31 March, 2011
opening fair Value of Plan assets                                                      63.62                        44.08
Expected Return on Plan Assets                                                           4.85                        3.36
Actuarial Gains/(Losses)                                                                 0.48                       (0.79)
Contributions by Employer                                                              34.12                        20.40
Benefits Paid                                                                          (4.86)                       (3.43)
closing fair Value of Plan assets                                                      98.21                        63.62

Experience adjustments
                                                                                                              (` in crores)

                                                31 march,      31 March,      31 March,         31 March        31 March
                                                    2012           2011           2010              2009            2008
Defined Benefit Obligations                          94.82         61.43           43.02           36.49            23.42
Plan Assets                                          98.21         63.62           44.08           29.83            17.78
Surplus/(Deficit)                                     3.39           2.19           1.06           (6.66)           (5.64)
Experience Adjustments on Plan Liabilities           27.31           1.55           1.27               3.30          3.57
Experience Adjustments on Plan Assets                 0.48         (0.78)           0.46           (0.73)           (0.17)

Axis Bank Ltd.

Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets

                                                                                  31 march, 2012         31 March, 2011
                                                                                              %                       %
Government securities                                                                        42.81                  40.48
Bonds, debentures and other fixed income instruments                                        43.85                   34.66
Money market instruments                                                                        9.89                18.34
Equity shares                                                                                   2.31                 5.20
Others                                                                                          1.14                  1.32

                                                                                  31 march, 2012          31 March, 2011
Principal actuarial assumptions at the balance sheet date:
Discount Rate                                                                          8.35% p.a.             8.05% p.a.
Expected rate of Return on Plan Assets                                                 7.50% p.a.             7.50% p.a.
Salary Escalation Rate                                                                 6.00% p.a.             6.00% p.a.
Employee Turnover
- 21 to 30 (age in years)                                                                  20.41%                16.55%
- 31 to 44 (age in years)                                                                  10.00%                10.00%
- 45 to 59 (age in years)                                                                   1.00%                  1.00%

The estimates of future salary increases considered take into account the inflation, seniority, promotion and other
relevant factors.

The expected rate of return on plan assets is based on the average long-term rate of return expected on investments
of the Fund during the estimated term of the obligations.



                                                                                                                    147
       As the contribution expected to be paid to the plan during the annual period beginning after the balance sheet date
       is based on various internal/external factors, a best estimate of the contribution is not determinable.

       The above information is as certified by the actuary and relied upon by the auditors.

       Axis Securities and Sales Ltd.

                                                                                          31 march, 2012         31 March, 2011
       The major categories of plan assets* as a percentage of fair value of total
       plan assets - Insurer Managed Funds                                                          100.00                 100.00
       *composition of plan assets is not available

                                                                                          31 march, 2012         31 March, 2011
       Principal actuarial assumptions at the balance sheet date:
       Discount Rate                                                                           9.20% p.a.             7.80% p.a.
       Expected rate of Return on Plan Assets                                                  7.50% p.a.             7.50% p.a.
       Salary Escalation Rate                                                                  6.00% p.a.             6.00% p.a.
       Employee Turnover
       - 21 to 44 (age in years)                                                              60.00% p.a.           60.00% p.a.
       - 45 to 59 (age in years)                                                               1.00% p.a.             1.00% p.a.

       The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
       and other relevant factors, such as supply and demand in the employment market.

       The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
       applicable to the period over which the obligation is to be settled.

       The Company expects to contribute `0.10 crore as gratuity in the year 2012-13.
       Axis Asset Management Company Ltd.

                                                                                          31 march, 2012         31 March, 2011
       Principal actuarial assumptions at the balance sheet date:
       Discount Rate                                                                           8.18% p.a.             8.13% p.a.
       Expected rate of Return on Plan Assets                                                       n.a.                   N.A.
       Salary Escalation Rate                                                                 10.00% p.a.            10.00% p.a.
       Employee Turnover                                                                      10.00% p.a.            10.00% p.a.

       The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
       and other relevant factors, such as supply and demand in the employment market.

2.1.13 Provisions and contingencies

       a)   Movement in provision for frauds included under other liabilities is set out below:
                                                                                                                      (` in crores)
                                                                                          31 march, 2012         31 March, 2011
            Opening balance at the beginning of the year                                             4.99                   0.21
            Additions during the year                                                              12.40                    4.78
            Reductions on account of payments during the year                                      (0.02)                      -
            Reductions on account of reversals during the year                                     (0.02)                      -
            closing balance at the end of the year                                                 17.35                    4.99



 148
        b)   Movement in provision for debit/credit card reward points is set out below:
                                                                                                                    (` in crores)

                                                                                        31 march, 2012         31 March, 2011
             Opening provision at the beginning of the year                                        25.01                  18.41
             Provision made during the year                                                        20.28                   8.25
             Reductions during the year                                                            (2.01)                 (1.65)
             closing provision at the end of the year                                              43.28                  25.01
        c)   Movement in provision for other contingencies (including derivatives) is set out below:
                                                                                                                    (` in crores)

                                                                                        31 march, 2011         31 March, 2010
             Opening provision at the beginning of the year                                        36.44                        -
             Provision made during the year                                                            0.38               36.44
             Reductions during the year                                                           (36.01)                       -
             closing provision at the end of the year                                                  0.81               36.44

2.1.14 Description of contingent liabilities:
        a)   Claims against the Group not acknowledged as debts
             These represent claims filed against the Group in the normal course of business relating to various legal cases
             currently in progress. These also include demands raised by income tax and other statutory authorities and
             disputed by the Group.
        b)   Liability on account of forward exchange and derivative contracts
             The Bank enters into foreign exchange contracts, currency options/swaps, interest rate/currency futures and
             forward rate agreements on its own account and for customers. Forward exchange contracts are commitments
             to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to
             exchange cash flows by way of interest/principal in two currencies, based on ruling spot rates. Interest rate swaps
             are commitments to exchange fixed and floating interest rate cash flows. Interest rate futures are standardised,
             exchange-traded contracts that represent a pledge to undertake a certain interest rate transaction at a specified
             price, on a specified future date. Forward rate agreements are agreements to pay or receive a certain sum based on
             a differential interest rate on a notional amount for an agreed period. A foreign currency option is an agreement
             between two parties in which one grants to the other the right to buy or sell a specified amount of currency at
             a specific price within a specified time period or at a specified future time. An Exchange Traded Currency Option
             contract is a standardized foreign exchange derivative contract, which gives the owner the right, but not the
             obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate
             on a specified date on the date of expiry. Currency Futures contract is a standardized, exchange-traded contract,
             to buy or sell a certain underlying currency at a certain date in the future, at a specified price.
        c)   Guarantees given on behalf of constituents
             As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their credit
             standing. Guarantees represent irrevocable assurances that the Bank will make payments in the event of the
             customer failing to fulfill its financial or performance obligations.
        d)   Acceptances, endorsements and other obligations
             These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the Bank’s
             customers that are accepted or endorsed by the Bank.
        e)   Other items for which the Group is contingently liable
             Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts
             remaining to be executed on capital account and commitments towards underwriting and investment in equity
             through bids under Initial Public Offering (IPO) of corporates as at the year end.



                                                                                                                          149
2.1.15 Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies
        In terms of General Circular No. 2/2011 of the Ministry of Corporate Affairs, Government of India dated 8th February
        2011.

                                                                                                                   (` in crores)
                                                          for the year ended 31 march, 2012
                                            axis                                     axis            axis asset
                                  securities and axis Private   axis Trustee mutual fund          management             axis
                                      salesLt d. equity Ltd.    services Ltd. Trustee Ltd.        company Ltd.      U.k. Ltd.@
        Capital                           120.00        15.00           1.50         0.05                174.00             -*
        Reserves and Surplus              (25.26)        3.79          17.63         0.07              (117.65)              -
        Total Assets (Fixed
        Assets + Investments
        + Other Assets)                   124.87        20.04          27.42             0.14             95.51           8.39
        Total Liabilities
        (Borrowings + Other
        Liabilities + Provisions)          30.13         1.25           8.29             0.02             39.16           8.39
        Investments                             -          -*              -             0.12             43.27              -
        Total Income                      164.65        13.22          19.95             0.12             38.33              -
        Profit/(Loss) Before
        Taxation                           (8.92)        1.55          15.87             0.05            (21.59)               -
        Provision for Taxation                  -        0.70           5.15             0.02                  -               -
        Profit/(Loss) After
        Taxation                           (8.92)        0.85          10.72             0.03            (21.59)               -
        Proposed Dividend
        and Tax (including
        cess thereon)                           -           -           1.74                  -                -               -
        * amount less than `50,000
        @ amount in INR equivalent of GBP (£1 = `81.4575 as on 31 March, 2012)

2.1.16 Comparative Figures
        Previous year figures have been regrouped and reclassified, where necessary to conform to current year’s presentation.



                                                                                                   for axis Bank Ltd.



                                                                                                   adarsh kishore
                                                                                                   Chairman


                             k. n. Prithviraj        V. r. kaundinya           s. B. mathur        shikha sharma
                             Director                Director                  Director            Managing Director & CEO


P. J. oza                    somnath sengupta
Company Secretary            Executive Director & CFO


Date : 27th April, 2012
Place: Mumbai




 150
DISCLOSURES UNDER THE NEW CAPITAL ADEQUACY FRAMEWORK
(BASEL II GUIDELINES) FOR THE YEAR ENDED 31 March, 2012
I.   SCOPE OF APPLICATION

     Axis Bank Limited (the ‘Bank’) is a commercial bank, which was incorporated on 3 December, 1993. The Bank is the
     controlling entity for all group entities that include its six wholly owned subsidiaries.

     The consolidated financial statements of the Bank comprise the financial statements of Axis Bank Limited and its
     subsidiaries that together constitute the ‘Group’. The Bank consolidates its subsidiaries in accordance with Accounting
     Standard 21 (AS-21) ‘Consolidated Financial Statements’ issued by the Institute of Chartered Accountants of India on a
     line-by-line basis by adding together the like items of assets, liabilities, income and expenditure. While computing the
     consolidated Bank’s Capital to Risk-weighted Assets Ratio (CRAR), the Bank’s investment in the equity capital of the
     wholly-owned subsidiaries is deducted, 50% from Tier 1 Capital and 50% from Tier 2 Capital. The subsidiaries of the Bank
     are not required to maintain any regulatory capital. The table below lists Axis Bank’s Subsidiaries/Associates/Joint ventures
     consolidated for accounting and their treatment for capital adequacy purpose.

     Sr. No.   Name of the entity                 Nature of Business                       Holding Basis of Consolidation
     1.        Axis Securities and Sales Ltd.     Marketing of credit cards and retail     100%        Fully consolidated
                                                  asset products and retail broking
     2.        Axis Private Equity Ltd.           Managing investments, venture capital    100%        Fully consolidated
                                                  funds and off shore funds
     3.        Axis Trustee Services Ltd.         Trusteeship services                     100%        Fully consolidated
     4.        Axis Mutual Fund Trustee Ltd.      Trusteeship                              100%        Fully consolidated
     5.        Axis Asset Management              Asset Management                         100%        Fully consolidated
               Company Ltd.
     6.        Bussan Auto Finance India           Non-Banking Financial company           26%         Treated as an associate
               Private Ltd.
     The investment in Bussan Auto Finance India Private Ltd. is not deducted from the capital funds of the Bank but is assigned
     risk-weights as an investment.

     On 7 March, 2011, the Bank has incorporated a new subsidiary, namely Axis U.K. Limited as a private limited company
     registered in the United Kingdom (UK) with the main purpose of filing an application with Financial Services Authority
     (FSA), UK for a banking licence in the UK and for the creation of necessary infrastructure for the subsidiary to commence
     banking business. As on 31 March, 2012, Axis U.K. Limited has not commenced any operations.

     There is no deficiency in capital of any of the subsidiaries of the Bank as on 31 March, 2012. Axis Bank actively monitors
     all its subsidiaries through their respective Boards and regular updates to the Board of Directors of Axis Bank.

     As on 31 March, 2012, the Bank has an investment of `76.6 crores in Max New York Life Insurance Company Limited
     which is not deducted from the capital funds of the Bank, but is assigned risk weights as an investment for the purpose
     of Basel II, the details of which are given below.

     Country of Incorporation             :   India
     Ownership Interest                   :   less than 4%
     The quantitative impact on regulatory capital of using risk weighted investments method versus using the deduction
     method at 31 March, 2012 is set out in the following table.

                                                                                                                     ( ` in crores)
     Method                                                                                                Quantitative impact
     Deduction method                                                                                                    76.60
     Capital @ 9% of risk weighted assets                                                                                 9.03




                                                                                                                            151
II.   CAPITAL STRUCTURE

      Summary

      As per RBI’s capital adequacy norms capital funds are classified into Tier-1 and Tier-2 capital. Tier-1 capital of the Bank
      consists of equity capital, statutory reserves, other disclosed free reserves, capital reserves and innovative perpetual debt
      instruments eligible for inclusion in Tier-1 capital that complies with the requirement specified by RBI. The Tier-2 capital
      consists of general provision and loss reserves, upper Tier-2 instruments and subordinate debt instruments eligible for
      inclusion in Tier-2 capital. Axis Bank has issued debt instruments that form a part of Tier-1 and Tier-2 capital. The terms
      and conditions that are applicable for these instruments comply with the stipulated regulatory requirements.

      Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years. Interest on Tier-1 bonds is
      payable either annually or semi-annually. Some of the Tier-1 bonds have a step-up clause on interest payment ranging up
      to 100 bps. The Upper Tier-2 bonds have an original maturity of 15 years with a call option after 10 years. The interest on
      Upper Tier-2 bonds is payable either annually or semi-annually. Some of the Upper Tier-2 debt instruments have a step-up
      clause on interest payment ranging up to 100 bps. The Lower Tier-2 bonds have an original maturity between 5 to 10
      years. The interest on lower Tier-2 capital instruments is payable either semi-annually or annually.

      Equity Capital

      The Bank has authorized share capital of `500.00 crores comprising 500,000,000 equity shares of `10/- each. As on
      31 March, 2012 the Bank has issued, subscribed and paid-up equity capital of `413.20 crores, constituting 413,203,952
      number of shares of `10/- each. The Bank’s shares are listed on the National Stock Exchange and the Bombay Stock
      Exchange. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE).

      During the year, the Bank has also allotted equity shares to employees under its Employee Stock Option Plan.

      The provisions of the Companies Act, 1956 and other applicable laws and regulations govern the rights and obligations
      of the equity share capital of the Bank.

      Debt Capital Instruments

      The Bank has raised capital through Innovative Perpetual Debt Instrument (IPDI) eligible as Tier 1 Capital and Tier 2 Capital
      in the form of Upper Tier 2 and Subordinated bonds (unsecured redeemable non-convertible debentures), details of which
      are given below.

      Perpetual Debt Instrument

      The Bank has raised Perpetual Debt Instruments eligible as Tier 1 Capital, the aggregate value of which as on 31 March,
      2012 was `448.03 crores as stated below.

      Date of Allotment                     Rate of Interest             Period                       Amount
      30 September, 2006                    10.05%                       Perpetual                    `214.00 crores
      15 November, 2006                     7.167%                       Perpetual                    USD 46 million*

                                                                                                      (`234.03 crores)
      Total Perpetual Debt                                                                            `448.03 crores

      *Converted to INR @ `50.875 to a US Dollar (prevailing exchange rate as on 31.3.2012)




 152
Upper Tier 2 Capital

The Bank has also raised Upper Tier 2 Capital, the aggregate value of which as on 31 March, 2012 was `1,374.74 crores
as per the table below.

Date of Allotment             Date of Redemption             Rate of Interest               Amount
11 August, 2006               10 August, 2021                7.25%                          USD 149.89 million*
                                                                                            (`762.54 crores)
24 November, 2006             23 November, 2021              9.35%                          `200.00 crores
6 February, 2007              6 February, 2022               9.50%                          `107.50 crores
28 June, 2007                 28 June, 2022                  7.125%                         USD 59.89 million*
                                                                                            (`304.70 crores)
Total Upper Tier 2 Capital                                                                  `1,374.74 crores

*Converted to INR @ `50.875 to a US Dollar (prevailing exchange rate as on 31.3.2012)

Subordinated Debt

As on 31 March, 2012, the Bank had an outstanding Subordinated debt (unsecured redeemable non-convertible
debentures) aggregating `8,751.30 crores. Of this, `7,737.52 crores qualified as Lower Tier 2 capital, the details of which
are stated below.
                                                                                                              ( ` in crores)

Date of Allotment          Date of Redemption           Rate of Interest                                          Amount
20 September, 2002         20 June, 2012                9.30%                                                         62.00
21 December, 2002          21 September, 2012           8.95%                                                         60.00
26 July, 2003              26 April, 2013               7.00%                                                         65.00
15 January, 2004           15 October, 2013             6.50%                                                         50.00
25 July, 2005              25 July, 2012                Simple average of Mid of Bid and offer yield of             500.00
                                                        the 1-year GOI bench-mark (i.e. INBMK) plus
                                                        a margin of 65 basis points to be reset at semi
                                                        annual intervals.
22 March, 2006             22 June, 2013                8.50%                                                       125.00
22 March, 2006             22 June, 2013                8.32%                                                          5.00
22 March, 2006             22 March, 2016               8.75%                                                       360.00
22 March, 2006             22 March, 2016               8.56%                                                         10.00
28 June, 2006              28 September, 2013           8.95%                                                         33.50
28 June, 2006              28 June, 2016                9.10%                                                       104.90
30 March, 2007             30 March, 2017               10.10%                                                      250.90
7 November, 2008           7 November, 2018             11.75%                                                    1,500.00
28 March, 2009             28 March, 2019               9.95%                                                       200.00
16 June, 2009              16 June, 2019                9.15%                                                     2,000.00
1 December, 2011           1 December, 2021             9.73%                                                     1,500.00
20 March, 2012             20 March, 2022               9.30%                                                     1,925.00
Total                                                                                                             8,751.30

During the year, subordinated debts (unsecured redeemable non-convertible subordinated debentures) of `3,425 crores
were raised.



                                                                                                                     153
   Capital Funds
                                                                                                                   ( ` in crores)
   Position as on 31 March, 2012                                                                                      Amount
   A         Tier 1 Capital                                                                                          21,886.11
             Of which
             - Paid-up Share Capital                                                                                    413.20
             - Reserves and surplus (Excluding Foreign Currency Translation Reserve)                                 22,207.61
             - Innovative Perpetual Debt Instruments                                                                    448.03
             - Amount deducted from Tier 1 capital
                -   Investments in subsidiaries                                                                        (155.28)
                -   Deferred Tax Assets                                                                              (1,027.45)
   B         Tier 2 Capital (net of deductions) (B.1+B.2+B.3-B.4)                                                     9,758.84
             Out of above
   B.1       Debt Capital Instruments eligible for inclusion as Upper Tier 2 Capital
             - Total amount outstanding                                                                               1,374.74
             - Of which amount raised during the current year                                                                  -
             - Amount eligible as capital funds                                                                       1,374.74
   B.2       Subordinated debt eligible for inclusion in Lower Tier 2 Capital
             - Total amount outstanding                                                                               8,751.30
             - Of which amount raised during the current year                                                         3,425.00
             - Amount eligible as capital funds                                                                       7,737.52
   B.3       Other Tier 2 Capital - General provisions and loss reserves                                                801.86
   B.4       Deductions from Tier 2 Capital
             - Investments in Subsidiaries                                                                             (155.28)
   C         Total Eligible Capital                                                                                  31,644.95

III. CAPITAL ADEQUACY
   Axis Bank is subject to the capital adequacy guidelines stipulated by RBI, which are based on the framework of the Basel
   Committee on Banking Supervision. As per the capital adequacy guidelines under Basel I, the Bank is required to maintain
   a minimum ratio of total capital to risk weighted assets (CRAR) of 9.0%, at least half of which is required to be Tier 1
   Capital. As per Basel II guidelines, Axis Bank is required to maintain a minimum CRAR of 9.0%, with minimum Tier 1
   Capital ratio of 6.0%. In terms of RBI guidelines for implementation of Basel II, capital charge for credit and market risk
   for the financial year ended 31 March, 2012 will be required to be maintained at the higher levels implied by Basel II or
   80% of the minimum capital requirement computed as per the Basel I framework. For the year ended 31 March, 2012,
   the minimum capital required to be maintained by Axis Bank as per Basel II guidelines is higher than that required at 80%
   of the capital requirements under Basel I guidelines.
   An assessment of the capital requirement of the Bank is carried out through a comprehensive projection of future businesses
   that takes cognizance of the strategic intent of the Bank, profitability of particular businesses and opportunities for
   growth. The proper mapping of credit, operational and market risks to this projected business growth enables assignment
   of capital that not only adequately covers the minimum regulatory capital requirement but also provides headroom for
   growth. The calibration of risk to business is enabled by a strong risk culture in the Bank aided by appropriate, technology-
   based risk management systems. As part of the Internal Capital Adequacy Assessment Process (ICAAP) the Bank also
   assesses the adequacy of capital under stress. A summary of the Bank’s capital requirement for credit, market and
   operational risk and the capital adequacy ratio as on 31 March, 2012 is presented below.




154
                                                                                                                  ( ` in crores)

   Capital Requirements for various Risks                                                                            Amount
   CREDIT RISK
   Capital requirements for Credit Risk
   - Portfolios subject to standardized approach                                                                    17,815.22
   - Securitisation exposures                                                                                                  -
   MARKET RISK
   Capital requirements for Market Risk
   - Standardized duration approach                                                                                  1,749.29
     - Interest rate risk                                                                                            1,588.55
     - Foreign exchange risk (including gold)                                                                            29.31
     - Equity risk                                                                                                     131.43
   OPERATIONAL RISK
   Capital requirements for Operational risk
   - Basic indicator approach                                                                                        1,289.52
   Capital Adequacy Ratio of the Bank (%)                                                                             13.66%
   Tier 1 CRAR (%)                                                                                                     9.45%

IV. RISK MANAGEMENT: OBJECTIVES AND ORGANIZATION STRUCTURE
   The wide variety of businesses undertaken by the Bank requires it to identify, measure, control, monitor and report risks
   effectively. The key components of the Bank’s risk management rely on the risk governance architecture, comprehensive
   processes and internal control mechanism. The Bank’s risk governance architecture focuses attention on key areas of risk
   such as credit, market and operational risk and quantification of these risks wherever possible for effective and continuous
   monitoring.

   Objectives and Policies

   The Bank’s risk management processes are guided by well-defined policies appropriate for various risk categories,
   independent risk oversight and periodic monitoring through the sub-committees of the Board of Directors. The Board sets
   the overall risk appetite and philosophy for the Bank. The Committee of Directors, the Risk Management Committee and
   the Audit Committee of the Board, which are sub-committees of the Board, review various aspects of risk arising from the
   businesses of the Bank. Various senior management committees operate within the broad policy framework as illustrated
   below.




   The Bank has put in place policies relating to management of credit risk, market risk, operational risk and asset-liability
   both for the domestic as well as overseas operations. The overseas policies are drawn based on the risk perceptions of
   these economies and the Bank’s risk appetite.

   The Bank has formulated a comprehensive Stress Testing policy to measure impact of adverse stress scenarios on the
   adequacy of capital.



                                                                                                                         155
      Structure and Organization

      The Risk Department reports to the Executive Director and CFO and the Risk Management Committee of the Board
      oversees the functioning of the Department. The Department has three separate teams for Credit Risk, Market Risk and
      Operational Risk and the head of each team reports to the Chief Risk Officer.

                                                         Chief Risk Officer



                   Credit Risk                              Market risk                            Operational Risk

V.    CREDIT RISK
      Credit risk covers the inability of a borrower or counter-party to honour commitments under an agreement and any
      such failures, which have an adverse impact on the financial performance of the Bank. The Bank is exposed to credit risk
      through lending and capital market activities.
      Credit Risk Management Policy
      Credit Risk Management Policy lays down the roles and responsibilities, risk appetite, key processes and reporting
      framework. The Board of Directors establishes the parameters for risk appetite, which are defined quantitatively and
      qualitatively through strategic businesses plan as well as the Corporate Credit Policy. Corporate credit is managed through
      risk vetting of individual exposures at origination and through periodic review after sanctioning. Retail credit to individuals
      and small business is managed through definition of product criteria, appropriate credit filters and subsequent portfolio
      monitoring.
      Credit Rating System
      The foundation of credit risk management rests on the internal rating system. Rating linked single borrower exposure
      norms, delegation of powers, review frequency have been adopted by the Bank. The Bank has developed rating tools
      specific to market segments such as large and mid-corporates, SME, financial companies, microfinance companies and
      project finance to objectively assess underlying risk associated with such exposures.
      The credit rating tool uses a combination of quantitative inputs and qualitative inputs to arrive at a ‘point-in-time’ view of
      the risk profile of counterparty. Each internal rating grade corresponds to a distinct probability of default over one year.
      Go/No-Go score cards are used for various SME schematic products and retail agri schemes. Statistical application and
      behavioral scorecards have been developed for all major retail portfolios.
      The Bank recognizes cash margin, central/state government, bank and corporate guarantees, exclusive mortgage of
      properties and lease rental securitisation for the purpose of credit enhancement.
      Model validation is carried out periodically by objectively assessing the discriminatory power, calibration accuracy and
      stability of ratings.
      Credit Sanction and related processes
      The guiding principles behind the credit sanction process are us under.
	     •	   ‘Know	your	Customer’	is	a	leading	principle	for	all	activities.
	     •	   The	 acceptability	 of	 credit	 exposure	 is	 primarily	 based	 on	 the	 sustainability	 and	 adequacy	 of	 borrower’s	 normal	
           business operations and not based solely on the availability of security.
      Delegation of sanctioning powers is based on the size and rating of the exposures. The Bank has put in place the following
      hierarchical committee structure for credit sanction and review:
	     •	   Retail	Agriculture	Credit	Committee	(RACC)
	     •	   Central	Agriculture	Business	Credit	Committee	(CABCC)
	     •	   Regional	Credit	Committee	(RCC)



    156
	   •	   Central	Office	Credit	Committee	(COCC)
	   •	   Committee	of	Executives	(COE)
	   •	   Senior	Management	Committee	(SMC)
	   •	   Committee	of	Directors	(COD),	a	sub-committee	of	the	Board.

    All management level sanctioning committees require mandatory presence of a representative from Risk Department for
    quorum.

    Review and Monitoring

	   •	   All	credit	exposures,	once	approved,	are	monitored	and	reviewed	periodically	against	the	approved	limits.	Borrowers	
         with lower credit rating are subject to more frequent reviews.
	   •	   Credit	 audit	 involves	 independent	 review	 of	 credit	 risk	 assessment,	 compliance	 with	 internal	 policies	 of	 the	 Bank	
         and with the regulatory framework, compliance of sanction terms and conditions and effectiveness of loan
         administration.
	   •	   Customers	with	emerging	credit	problems	are	identified	early	and	classified	accordingly.	Remedial	action	is	initiated	
         promptly to minimize the potential loss to the Bank.

    Concentration Risk

    The Bank manages concentration risk by means of appropriate structural limits and borrower-wise limits based on
    creditworthiness. Credit concentration in the Banks’ portfolios is monitored for the following:
	   •	   Large	Exposures	to	Individual	Clients	or	Group:	The	Bank	has	individual	borrower-wise	exposure	ceilings	based	on	the	
         internal rating of the borrower as well as group-wise borrowing limits which are continuously tracked and monitored.
	   •	   Geographic	concentration	on	sensitive	sectors.
	   •	   Residual	maturity	concentration	of	loans	and	advances.
	   •	   Concentration	of	unsecured	loans	to	total	loans	and	advances.
	   •	   Concentration	by	Industry:	Industry	analysis	plays	an	important	part	in	assessing	the	concentration	risk	within	the	
         loan portfolio. Industries are classified into various categories based on factors such as demand-supply, input related
         risks, government policy stance towards the sector and financial strength of the sector in general. Such categorization
         is used in determining the expansion strategy for the particular industry.

    Portfolio Management

    Portfolio level risk analytics and reporting to senior management examines optimal spread of risk across various rating
    classes, undue risk concentration across any particular industry segments and credit risk quality migration. The Bank
    periodically monitors its portfolios for any lead indicators of stress which includes potential delinquencies, external rating
    downgrades and credit concentration. Borrowers or portfolios are marked for early warning when signs of weakness or
    financial deterioration are envisaged in order that timely remedial actions may be initiated. In-depth sector specific studies
    are undertaken on portfolios vulnerable to extraneous shocks and the results are shared with the business departments.
    The Bank has a well-defined stress testing policy in place and at least on a quarterly basis, stress testing is undertaken on
    various portfolios to gauge the impact of stress situations on the health of portfolio, profitability and capital adequacy.

    As regards retail lending, the focus has been on increasing lending to secured portfolios (mortgage, auto), while maintaining
    a cautious approach to unsecured lending (personal loans and credit card business). The Bank is continuously endeavoring
    to improve the quality of incremental origination through better credit underwriting standards using improved scorecards.
    Portfolio delinquency trends are monitored periodically.

    Definitions of Non-Performing Assets

    Advances are classified into performing and non-performing advances (NPAs) as per RBI guidelines. NPAs are further
    classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. An asset, including a leased
    asset, becomes non-performing when it ceases to generate income for the Bank.




                                                                                                                                  157
  An NPA is a loan or an advance where:

  1.   interest and/or instalment of principal remains overdue for a period of more than 90 days in respect of a term loan;

  2.   the account remains “out-of-order’’ for a period of more than 90 days in respect of an Overdraft or Cash Credit (OD/
       CC);

  3.   the bill remains overdue for a period of more than 90 days in case of bills purchased and discounted;

  4.   a loan granted for short duration crops will be treated as an NPA if the installments of principal or interest thereon
       remain overdue for two crop seasons; and

  5.   a loan granted for long duration crops will be treated as an NPA if the installments of principal or interest thereon
       remain overdue for one crop season.

  6.   In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative
       contract, if these remain unpaid for a period of 90 days from the specified due date for payment.

  Definition of Impairment
  At each balance sheet date, the Bank ascertains if there is any impairment in its assets. If such impairment is detected, the
  Bank estimates the recoverable amount of the asset. If the recoverable amount of the asset or the cash-generating unit to
  which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The
  reduction is treated as an impairment loss and is recognized in the profit and loss account.

  CREDIT RISK EXPOSURES

  Total Gross Credit Risk Exposure Including Geographic Distribution of Exposure – Position as on 31 March,
  2012
                                                                                                 (` in crores)
                                     Domestic (Outstanding)              Overseas (Outstanding)                           Total
  Fund Based                                        213,453.23                           27,632.63                 241,085.86
  Non Fund Based *                                   81,009.14                             9,739.10                  90,748.24
  Total                                             294,462.37                           37,371.73                 331,834.10

  * Non-fund based exposures are guarantees given on behalf of constituents and acceptances and endorsements.

  Distribution of Credit Risk Exposure by Industry Sector – Position as on 31 March, 2012

                                                                                                                   (` in crores)
                                                                                                  Amount
  Sr. No.   Industry Classification                                                      Fund Based          Non-Fund Based
                                                                                       (Outstanding)           (Outstanding)
  1.         Power Generation & Distribution                                                 7,979.39                18,913.59
  2.         Infrastructure (excluding Power)                                               13,350.47                12,052.89
            - Of which Roads & ports                                                         4,722.44                 2,928.02
            - Of which Telecommunication                                                     2,984.38                   990.35
  3.         Trade                                                                           8,723.04                 5,600.70
  4.         All Engineering                                                                 5,008.31                 8,915.27
            - Of which Electronics                                                             421.94                   130.63
  5.         Chemicals and chemical products                                                 6,570.08                 6,861.86
            - Of which Petro Chemicals                                                       1,412.68                 2,313.04
            - Of which Drugs & Pharmaceuticals                                               2,069.88                   707.39




158
                                                                                                       (` in crores)
                                                                                        Amount
Sr. No.   Industry Classification                                              Fund Based        Non-Fund Based
                                                                             (Outstanding)         (Outstanding)
6.        Iron and Steel                                                           5,472.98               5,464.43
7.        NBFCs                                                                    7,344.26               1,173.34
8.        Food Processing                                                          5,178.28                 342.50
9.        Edible Oils and Vanaspati                                                1,055.37               3,558.94
10        Mining and quarrying (incl. coal)                                        3,525.47                 561.87
11.       Computer Software                                                        2,576.90               1,208.25
12.       Vehicles, vehicle parts and transport equipments                         2,866.07                 531.52
13.       Other Metal and Metal products                                           1,156.08               2,217.86
14.       Cotton Textiles                                                          2,682.46                 426.96
15.       Cement and cement products                                               1,882.04                 733.02
16.       Construction                                                               742.53               1,563.02
17.       Other Textiles                                                           1,713.59                 329.47
18.       Gems and Jewellery                                                       1,543.28                 377.94
19.       Sugar                                                                    1,557.57                 129.51
20.       Paper and Paper Products                                                 1,067.77                 276.10
21.       Rubber, Plastic and their products                                         697.33                 162.75
22.       Petroleum, coal products and nuclear fuels                                 560.78                 259.61
23.       Beverage & Tobacco                                                         597.53                  42.51
24.       Tea                                                                        245.53                  41.83
25.       Leather and Leather products                                                66.81                  24.94
26.       Jute Textiles                                                               16.53                   0.07
27.       Other Industries                                                        41,289.99              16,304.76
          - Of which Banking and Finance                                          14,444.61               5,870.41
          - Of which Commercial real estate                                        6,801.44                 586.97
          - Of which Shipping                                                      2,942.71                 934.42
          - Of which Professional services                                         3,120.75               2,470.31
28.       Residual exposures to balance the total exposure                       115,615.42               2,672.73
          Total                                                                  241,085.86              90,748.24

As on 31 March, 2012, the Bank’s exposure to the industries stated below was more than 5% of the total gross credit
exposure:

Sr. No.   Industry Classification                                  Percentage of the total gross credit exposure
1.        Power Generation & Distribution                                                                      8%
2.        Infrastructure                                                                                       8%
3.        Banking & Finance                                                                                    6%




                                                                                                             159
  Residual Contractual Maturity breakdown of Assets – Position as on 31 March, 2012
                                                                                                      (` in crores)
  Maturity Bucket                                   Cash, balances   Investments        Advances     Other assets
                                                     with RBI and                                       including
                                                      other banks                                    fixed assets
  1 day                                                   4,238.48      1,815.57          2,707.12          35.03
  2 to 7 days                                             1,479.54      4,967.79          1,219.95        283.38
  8 to 14 days                                              367.88      3,691.25          1,152.06        131.45
  15 to 28 days                                             516.80      5,874.62          1,532.15        950.04
  29 days to 3 months                                     1,011.93     13,506.00          9,362.88      1,130.71
  Over 3 months and upto 6 months                         1,086.69      7,463.40        10,988.78         964.53
  Over 6 months and upto 12 months                        1,690.28     15,172.80        11,477.47         477.68
  Over 1 year and upto 3 years                              694.66     13,743.18        39,002.39         142.71
  Over 3 years and upto 5 years                             687.67      6,997.13        23,791.70            0.00
  Over 5 years                                            2,159.98     19,960.35        68,525.04       4,626.73
  Total                                                  13,933.91     93,192.09       169,759.54       8,742.26

  Movement of NPAs and Provision for NPAs (including NPIs) – Position as on 31 March, 2012
                                                                                                      (` in crores)
                                                                                                         Amount
  A.      Amount of NPAs (Gross)*                                                                       1,806.30
          - Substandard                                                                                   561.18
          - Doubtful 1                                                                                    147.64
          - Doubtful 2                                                                                    146.69
          - Doubtful 3                                                                                      20.67
          - Loss                                                                                          930.12
  B.      Net NPAs                                                                                        472.64
  C.      NPA Ratios
          - Gross NPAs (including NPIs) to gross advances (%)                                              1.06%
          - Net NPAs (including NPIs) to net advances (%)                                                  0.28%
  D.      Movement of NPAs (Gross)
          - Opening balance as on 1.4.2011                                                              1,599.42
          - Additions                                                                                   1,841.94
          - Reductions                                                                                 (1,635.06)
          - Closing balance as on 31.3.2012                                                             1,806.30
  E.      Movement of Provision for NPAs
          -   Opening balance as on 1.4.2011                                                            1,186.74
          -   Provision made in 2011-12                                                                   826.11
          -   Transfer of restructuring provision                                                           (1.38)
          -   Write – offs / Write – back of excess provision                                            (687.55)
          -   Closing balance as on 31.3.2012                                                           1,323.92

  * includes `6.61 crores outstanding under Application Money classified as non- performing asset.




160
NPIs and Movement of Provision for Depreciation on NPIs - Position as on 31 March, 2012
                                                                                                                 (` in crores)
                                                                                                                    Amount
A.     Amount of Non-Performing Investments                                                                            79.46
       Amount of Non-Performing Investments - Others*                                                                    6.61
B.     Amount of Provision held for Non-performing investments                                                         63.52
       Amount of Provision held for Non-performing investments - Others*                                                 5.49
C.     Movement of provision for depreciation on investments
       - Opening balance as on 1.4.2011                                                                               269.45
       - Provision made in 2011-12                                                                                    105.97
       - Write – offs                                                                                                        -
       - Write – back of excess provision                                                                             (47.87)
       - Closing balance as on 31.3.2012                                                                              327.55

* represents amount outstanding under Application Money classified as non-performing asset.

Credit Risk: Use of Rating Agency under the Standardized Approach

The RBI guidelines on Basel II require banks to use ratings assigned by specified External Credit Assessment Agencies
(ECAIs) namely CRISIL, CARE, ICRA & Fitch (India) for domestic counterparties and Standard & Poor’s, Moody’s and Fitch
for foreign counterparties.

The Bank is using issuer ratings and short-term and long-term instrument/bank facilities’ ratings which are assigned
by the accredited rating agencies viz. CRISIL, ICRA, Fitch and CARE and published in the public domain to assign risk-
weights in terms of RBI guidelines. In respect of claims on non-resident corporates and foreign banks, ratings assigned by
international rating agencies i.e. Standard & Poor’s, Moody’s and Fitch is used. For exposures with contractual maturity of
less than one year, a short-term rating is used. For cash credit facilities and exposures with contractual maturity of more
than one year, long-term rating is used.

Issue ratings would be used if the Bank has an exposure in the rated issue and this would include fund-based and non-
fund based working capital facilities as well as loans and investments. In case the Bank does not have exposure in a rated
issue, the Bank would use the issue rating for its comparable unrated exposures to the same borrower, provided that
the Bank’s exposures are pari-passu or senior and of similar or lesser maturity as compared to the rated issue. Structured
Obligation (SO) ratings are not used unless the Bank has a direct exposure in the ‘SO’ rated issue. If an issuer has a long-
term or short-term exposure with an external rating that warrants a risk weight of 150%, all unrated claims on the same
counterparty, whether short-term or long-term, also receive 150% risk weight, unless the Bank uses recognized credit risk
mitigation techniques for such claims.

Issuer ratings provide an opinion on the general credit worthiness of the rated entities in relation to their senior unsecured
obligations. Therefore, issuer ratings would be directly used to assign risk-weight to unrated exposures of the same
borrower.

Details of Gross Credit Risk Exposure (Fund based and Non-fund based) based on Risk-Weight - Position as on
31 March, 2012
                                                                                                (` in crores)
                                                                                                                   Amount
Below 100% risk weight                                                                                           178,311.27
100% risk weight                                                                                                 131,286.01
More than 100% risk weight                                                                                        22,236.82
Deduction from capital funds
- Investments in subsidiaries                                                                                         310.55



                                                                                                                       161
VI. CREDIT RISK MITIGATION

   The Bank uses various collaterals both financial as well as non-financial, guarantees and credit insurance as credit risk
   mitigants. The main financial collaterals include bank deposits, NSC/KVP/LIP and gold, while main non-financial collaterals
   include land and building, plant and machinery, residential and commercial mortgages. The guarantees include guarantees
   given by corporate, bank and personal guarantees. This also includes loans and advances guaranteed by Export Credit &
   Guarantee Corporation Limited (ECGC), Credit Guarantee Fund Trust for Small Industries (CGTSI), Central Government
   and State Government.

   The Bank has in place a collateral management policy, which underlines the eligibility requirements for credit risk mitigants
   (CRM) for capital computation as per Basel II guidelines. The Bank reduces its credit exposure to counterparty with the
   value of eligible financial collateral to take account of the risk mitigating effect of the collateral. To account for the
   volatility in the value of collateral, haircut is applied based on the type, issuer, maturity, rating and remargining/revaluation
   frequency of the collateral. The Bank revalues various financial collaterals at varied frequency depending on the type of
   collateral. The Bank has a valuation policy that covers processes for collateral valuation and empanelment of valuers.

   Details of total credit exposure (after on or off balance sheet netting) as on 31 March, 2012
                                                                                                                       (` in crores)

                                                                                                                          Amount
   Covered by :
   -   Eligible financial collaterals after application of haircuts                                                       6,220.98
   -   Guarantees/credit derivatives                                                                                      6,655.99

VII. SECURITISATION

   The primary objectives for undertaking securitisation activity by the Bank are enhancing liquidity, optimization of usage of
   capital and churning of the assets as part of risk management strategy.

   The securitisation of assets generally being undertaken by the Bank is on the basis of “True Sale”, which provides 100%
   protection to the Bank from default. All risks in the securitised portfolio are transferred to a Special Purpose Vehicle (SPV),
   except where the Bank provides sub-ordination of cash flows to Senior Pass-Through Certificate (PTC) holders by retaining
   the junior tranche of the securitised pool. The Bank has not sponsored any special purpose vehicle which is required to be
   consolidated in the consolidated financial statements as per accounting norms.

   Bank may also invest in securitised instruments which offer attractive risk adjusted returns. During FY 2012 no fresh
   investments in securitised instruments had been made. The Bank enters into purchase/sale of corporate and retail loans
   through direct assignment/SPV. In most cases, post securitisation, the Bank continues to service the loans transferred to
   the assignee/SPV. The Bank also provides credit enhancement in the form of cash collaterals and/or by subordination of
   cash flows to Senior PTC holders. The Bank however does not follow the originate to distribute model and pipeline and
   warehousing risk is not material to the Bank.

   Valuation of securitised exposures is carried out in accordance with FIMMDA/RBI guidelines. Gain on securitisation is
   recognized over the period of the underlying securities issued by the SPV. Loss on securitisation is immediately debited
   to profit and loss account. In respect of credit enhancements provided or recourse obligations (projected delinquencies,
   future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale in accordance with
   AS 29 ‘Provisions, contingent liabilities and contingent assets’.

   The Bank follows the standardized approach prescribed by the RBI for the securitisation activities. The Bank uses the
   ratings assigned by various external credit rating agencies viz. CRISIL, ICRA, Fitch and CARE for its securitisation exposures.

   All transfers of assets under securitisation were effected on true sale basis. However in the financial year ended
   31 March, 2012, the Bank has not securitised any asset.



162
A.   Banking Book

     Details of Exposure Securitised by the Bank and subject to Securitisation Framework
                                                                                                           (` in crores)

     Sr. No.     Type of Securitisation                                                                      Amount
     1.          Total amount of exposures securitised                                                                 -
     2.          Losses recognized by the Bank during the current period                                               -
     3.          Amount of assets intended to be securitised within a year                                             -
                 Of which
                 - Amount of assets originated within a year before securitisation                                  NA
     4.          Amount of exposures securitised
                 - Corporate Loans                                                                                     -
     5.          Unrecognised gain or losses on sale
                 - Corporate Loans                                                                                     -

     Aggregate amount of Securitisation Exposures Retained or Purchased as on 31 March, 2012 is given below

                                                                                                           (` in crores)

     Sr. No.    Type of Securitisation                       On Balance Sheet (Amount)     Off Balance Sheet (Amount)
     1.         Retained                                                              -                                -
     2.         Securities purchased                                                  -                                -
     3.         Liquidity facility                                                    -                                -
     4.         Credit enhancement (cash collateral)                                  -                                -
     5.         Other commitments                                                     -                                -

     Risk-weight wise Bucket Details of the Securitisation Exposures on the Basis of Book-Value
                                                                                                           (` in crores)

                                                                                      Amount           Capital Charge
     Below 100% risk weight                                                                    -                       -
     100% risk weight                                                                          -                       -
     More than 100% risk weight                                                                -                       -
     Deductions
     - Entirely from Tier I capital                                                            -                       -
     - Credit enhancing I/Os deducted from Total Capital                                       -                       -
     - Credit enhancement (cash collateral)                                                    -                       -

B.   Trading Book

     Details of Exposure Securitised by the Bank and subject to Securitisation Framework

                                                                                                           (` in crores)

     Sr. No.    Type of Securitisation                                                                       Amount
     1.         Aggregate amount of exposures securitised by the Bank for which the Bank has
                retained some exposures and which is subject to the market risk approach                            NIL




                                                                                                                 163
      Aggregate amount of Securitisation Exposures Retained or Purchased as on 31 March, 2012 is given below

                                                                                                                       (` in crores)

      Sr. No.    Type of Securitisation                      On Balance Sheet (Amount)             Off Balance Sheet (Amount)
      1.         Retained                                                                   -                                      -
      2.         Securities purchased
                 - Corporate Loans                                                      33.54                                      -
                 - Lease Rental                                                        182.29                                      -
      3.         Liquidity facility                                                         -                                      -
      4.         Credit enhancement (cash collateral)                                       -                                      -
      5.         Other commitments                                                          -                                      -

      Risk-weight wise Bucket Details of the Securitisation Exposures on the Basis of Book-Value
                                                                                                                       (` in crores)

                                                                                                     Amount        Capital charge
      1.         Exposures subject to Comprehensive Risk Measure for specific risk
                 - Retained                                                                                   -                    -
                 - Securities purchased                                                                       -                    -
      2.         Exposures subject to the securitisation framework for specific risk
                 Below 100% risk weight                                                                215.83                11.44
                 100% risk weight                                                                             -                    -
                 More than 100% risk weight                                                                   -                    -
      3.         Deductions
                 - Entirely from Tier I capital                                                               -                    -
                 - Credit enhancing I/Os deducted from Total Capital                                          -                    -
                 - Credit enhancement (cash collateral)                                                       -                    -

VIII. MARKET RISK IN TRADING BOOK

      Market risk is the risk of loss to the Bank’s earnings and capital due to changes in the market level of interest rates, price
      of securities, foreign exchange rates and equities, as well as the volatilities of those changes. The Bank is exposed to
      market risk through its investment activities and also trading activities, which are undertaken for customers as well as on
      a proprietary basis. The Bank adopts a comprehensive approach to market risk management for its trading, investment
      and asset/liability portfolios. For market risk management, the Bank has:

      •	   Well	laid	down	policies	and	guidelines	which	are	aligned	to	the	regulatory	norms	and	based	on	experiences	gained	
           over the years.

	     •	   Mechanism	for	periodic	review	of	the	market	risk	management	policies.	

	     •	   Process	manual	which	are	updated	regularly	to	incorporate	best	practices.

	     •	   Market	risk	identification	through	elaborate	mapping	of	the	Bank’s	main	businesses	for	various	market	risks.			

	     •	   Statistical	measures	like	Value	at	Risk	(VaR),	supplemented	by	stress	tests,	back	tests		and	scenario	analysis.

	     •	   Non-statistical	 measures	 like	 position	 limits,	 marked-to-market	 (MTM),	 gaps	 and	 sensitivities	 (mark-to-market,	
           position limits, duration, PVBP, option Greeks).

	     •	   Management	Information	System	(MIS)	for	timely	market	risk	reporting	to	senior	management	functionaries.




    164
Risk limits such as position limits, stop-loss limits, alarm limits, gaps and sensitivities (duration, PVBP, option greeks)
are set up, based on a number of criteria including regulatory guidelines, relevant market analysis, business strategy,
management experience and the Bank’s risk appetite. These limits are monitored on a daily basis and the exceptions are
put up to ALCO and Risk Management Committee of the Board. As a prudent market risk management measure, risk
limits are reviewed, at least, annually or more frequently, if deemed necessary, to align the limits with the Bank’s risk
appetite, market conditions and trading strategies.

The Bank uses Historical Simulation and its variants for computing VaR for its trading portfolio. VaR is calculated at a
99% confidence level for a one-day holding period. The model assumes that the risk factor changes observed in the past
are a good estimate of those likely to occur in the future and is, therefore, limited by the relevance of the historical data
used. The Bank typically uses 250 days of historical data or one year of relative changes in historical rates and prices. The
method, however, does not make any assumption about the nature or type of the loss distribution. The VaR models for
different portfolios are back-tested at regular intervals and the results are used to maintain and improve the efficacy of
the model. The VaR is computed on a daily basis for the trading portfolio and reported to the senior management of the
Bank.

The VaR measure is supplemented by a series of stress tests and sensitivity analysis that estimates the likely behaviour of
a portfolio under extreme but plausible conditions and its impact on earnings and capital. The Bank undertakes stress
tests for market risks for its trading book, IRS, forex open position and forex gaps as well as for liquidity risk at the end of
each quarter. The Bank is in the process of building its capabilities to migrate to advanced approach i.e. Internal Models
Approach for assessment of market risk capital.

For this purpose, system capabilities are being strengthened, newer processes are being introduced and employee skills
are being improved.

Concentration Risk

The Bank has allocated the internal risk limits in order to avoid concentrations, wherever relevant. For example, the
Aggregate Gap Limit is allocated to various currencies and maturities as Individual Gap Limits to monitor concentrations.
Similarly, stop-loss limits and duration limits have been set up for different categories within a portfolio. Within the overall
PV01 limit, a sub limit is set up which is not expected to be breached by trades linked to any individual benchmark.

Liquidity Risk

Liquidity Risk is the current and prospective risk to earnings or capital arising from a bank’s inability to meet its current or
future obligations on the due date. Liquidity risk is two-dimensional viz., risk of being unable to fund portfolio of assets
at appropriate maturity and rates (liability dimension) and the risk of being unable to liquidate an asset in a timely manner
at a reasonable price (asset dimension).

The goal of Liquidity Risk Management is to meet all commitments on the due date and also be able to fund new
investment opportunities by raising sufficient funds in the form of increasing fresh liabilities or by expeditious asset sell-off
without incurring unacceptable losses, both under normal and adverse conditions. These objectives are ensured by setting
up policies, operational level committees, measurement tools and monitoring and reporting mechanism using effective
use of IT systems for availability of quality data.

The Bank manages its liquidity on a static as well as dynamic basis using various tools such as gap analysis, ratio analysis,
dynamic liquidity statements and scenario analysis. The Bank’s ALM policy defines the tolerance limits for its structural
liquidity position. The Liquidity Policy for the domestic operations as well as for the overseas branches lay down the
operational framework for prudent risk management in the Bank. The liquidity profile of the Bank is analyzed on a static
basis by tracking all cash inflows and outflows in the maturity ladder based on the expected occurrence of cash flows.
The liquidity profile of the Bank is also estimated on a dynamic basis by considering the growth in deposits and loans,
investment obligations, etc. for a short-term period of three months. The Bank undertakes behavioral analysis of the non-
maturity products viz. savings and current deposits and cash credit/overdraft accounts on a periodic basis, to ascertain the
volatility of residual balances in those accounts. The renewal pattern and premature withdrawals of term deposits and
drawdown of unavailed credit limits are also captured through behavioral studies. The concentration of large deposits is
monitored on a periodic basis.



                                                                                                                          165
   The Bank’s ability to meet its obligations and fund itself in a crisis scenario is critical and accordingly, liquidity stress
   tests are conducted under different scenarios at periodic intervals to assess the impact on liquidity to withstand stressed
   conditions. The liquidity positions of overseas branches are managed in line with the Bank’s internal policies and host
   country regulations. Such positions are also reviewed centrally by the Bank’s ALCO along with domestic positions.

   Counterparty Risk

   The Bank has a Counterparty Risk Management Policy incorporating well laid-down guidelines, processes and measures
   for counterparty risk management. The policy includes separate counterparty rating models for commercial banks, foreign
   banks and co-operative banks for determining maximum permissible limits for counterparties. Counterparty limits are
   monitored daily and internal triggers are put in place to guard against breach in limits. Credit exposures to issuer of bonds,
   advances, etc. are monitored separately under the prudential norms for exposure to a single borrower as per the Bank’s
   Corporate Credit Risk Policy or Investment Policy, as applicable. The counterparty exposure limits are reviewed at periodic
   intervals based on financials of the counterparties, business need, past transaction experiences and market conditions.
   The Bank has also put in place the “Suitability & Appropriateness Policy” and Loan Equivalent Risk (LER) Policy to evaluate
   counterparty risk arising out of all customer derivatives contracts.

   Country Risk

   The Bank has a comprehensive policy for Country Risk Management. The Bank uses the seven-category classification i.e.
   insignificant, low, moderate, high, very high, restricted and off-credit followed by the Export Credit Guarantee Corporation
   Ltd. (ECGC) and ratings of international rating agency Dun & Bradstreet for monitoring the country exposures. The
   categorisation of countries are undertaken at monthly intervals or at more frequent intervals if the situation so warrants.
   Exposure to a country includes all credit-related lending, trading and investment activities, whether cross border or locally
   funded. The Bank has set up exposure limits for each risk category as also per country exposure limits. These limits are
   monitored at weekly intervals. In addition, exposures to high risk, very high risk, restricted and off-credit countries are
   approved on a case-to- case basis. As a proactive measure of Country Risk Management, Risk Department issues “Rating
   Watch” from time to time. On the basis of country-specific developments, the concerned business departments are
   provided news with brief reviews of those countries which have a very high probability of a rating downgrade or there is
   any negative news or developments.

   Risk Management Framework for Overseas Operations

   The Bank has put in place separate risk management policies for its overseas branches in Singapore, Hong Kong, Dubai
   and Colombo. These country-specific risk policies are based on the host country regulators’ guidelines and in line with the
   practices followed for the Indian operations. The Asset Liability Management and all the risk exposures for the overseas
   operations are monitored centrally at the Central Office.

   Capital Requirement for Market Risk - Position as on 31 March, 2012
                                                                                                                      (` in crores)

                                                                                                  Amount of Capital Required
   - Interest rate risk                                                                                                  1,588.55
   - Equity position risk                                                                                                  131.43
   - Foreign exchange risk (including gold)                                                                                 29.31

IX. OPERATIONAL RISK

   Strategies and Processes
   Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from external
   events. Operational risk management (ORM) framework, ORM policy, operational risk loss data collection methodology,
   risk & control self-assessment framework, key risk indicator framework, roles and responsibilities of ORM function have
   been approved by the Bank to ensure that operational risk within the Bank is properly identified, assessed, monitored,
   controlled/mitigated and reported in a structured manner.




166
Based on the above policy/framework/methodologies, the Bank has initiated several measures to manage operational risk.
The Bank has put in place a hierarchical structure to effectively manage operational risk through the formation of several
internal committees viz., Operational Risk Management Committee (ORMC), Product Management Committee (PMC),
Change Management Committee (CMC), Outsourcing Committee, Software Evaluation Committee and IT Security
Committee. The functioning of these committees has stabilised. The Risk Department acts as the convenor of ORMC and
Sub-ORMC and is a member in PMC, CMC, Outsourcing Committee, Software Evaluation Committee and IT Security
Committee.
The Bank has further enhanced its capability for effective management of operational risk with the implementation of
a software solution (OR Monitor) which creates a database on loss events experienced by the different business lines of
the Bank, identify areas which show manifestation of weak controls through Risk & Control Self Assessment (RCSA) and
Key Risk Indicator (KRI) modules, and over a period would enable the Bank to adopt sophisticated approaches for the
computation of capital for operational risk.

Structure and Organization

The Risk Management Committee (RMC) of the Board at the apex level is the policy making body. RMC is supported by
the Operational Risk Management Committee (ORMC), consisting of Senior Management personnel, which is responsible
for implementation of the Operational Risk policies of the Bank. This internal committee supervises effective monitoring
of operational risk and the implementation of software driven framework for enhanced capability to manage operational
risk. A sub-committee of ORMC (Sub-ORMC) has been constituted to assist the ORMC in discharging its functions by
deliberating the operational risk issues in detail and escalating the critical issues to ORMC.

Scope and Nature of Operational Risk Reporting and Measurement Systems

A systematic process for reporting risks, losses and non-compliance issues relating to operational risks has been developed
and implemented. The information gathered is being used to develop triggers to initiate corrective actions to improve
controls. All critical risks and potential loss events would be reported to the Senior Management/ORMC/RMC as
appropriate, for their directions and suggestions.

Policies for Hedging and Mitigating Operational risk

An Operational Risk Management Policy approved by the Risk Management Committee of the Board details the framework
for hedging and/or mitigating operational risk in the Bank. Business units put in place basic internal controls as approved
by the Product Management Committee to ensure appropriate controls in the operating environment throughout the
Bank. As per the policy, all new products are being vetted by the Product Management Committee to identify and
assess potential operational risks involved and suggest control measures to mitigate the risks. Each new product or
service introduced is subject to a risk review and signoff process where all relevant risks are identified and assessed by
departments independent of the risk-taking unit proposing the product. Similarly, any changes to the existing products/
processes are being vetted by the Change Management Committee. In addition to the above, the business departments
submit Action Taken Reports, after implementation of the product, to the Product Management Committee for their
review. The product is also independently reviewed by the Internal Audit Department of the Bank.

Approach for Operational Risk Capital Assessment

As per the RBI guidelines, the Bank has followed the Basic Indicator Approach for the year ending 31 March, 2012. The
Bank has put in place a structure for identifying gaps in internal controls across the entire Bank. Simultaneously, the Bank
is preparing itself for migration to the Advanced Measurement Approach.

Interest Rate Risk in the Banking Book (IRRBB)

The IRRBB is managed according to the guidelines of the Bank’s ALM Policy. The Bank assesses its exposure to interest
rate risk in the banking book at the end of each quarter considering a drop in the market value of investments due to
50 bps change in interest rates. Calculation of interest rate risk in the banking book (IRRBB) is based on a present value
perspective with cash flows discounted at zero coupon yields published by National Stock Exchange (NSE) for domestic
balance sheet and USD LIBOR for overseas balance sheet. Other currencies are taken in equivalent base currencies (INR
for domestic books and USD for overseas branches) as the Bank does not have material exposures to other currencies as




                                                                                                                     167
  a percentage of the balance sheet. Cash flows are assumed to occur at the middle of the regulatory buckets. Non-interest
  sensitive products like cash, current account, capital, volatile portion of savings bank deposits, etc. are excluded from the
  computation. The Bank does not run a position on interest rate options that might result in non-linear pay-off. Future
  interest cash flows from outstanding balances are included in the analysis.

  The Bank employs Earnings at Risk (EaR) measures to assess the sensitivity of its net interest income to parallel movement
  in interest rates on the entire balance sheet. The results of EaR measures are reported to the senior management on a
  weekly basis.

  The findings of the various IRRBB measures are submitted to the ALCO, which is the apex committee for providing
  strategic guidance and direction for the ALM measures.

  Details of increase (decline) in earnings and economic value for upward and downward rate shocks based on balance
  sheet as on 31 March, 2012 are given below:

  Earnings Perspective
                                                                                                                   (` in crores)

  Country                                                                                     Interest Rate Shock
                                                                                           0.50%               (-) 0.50%
  India                                                                                   (125.86)              125.86
  Overseas                                                                                 37.49                (37.49)
  Total                                                                                    (88.37)               88.37

  Economic Value Perspective
                                                                                                                   (` in crores)

  Country                                                                                     Interest Rate Shock
                                                                                           0.50%               (-) 0.50%
  India                                                                                    359.71              (352.89)
  Overseas                                                                                 47.96                (50.35)
  Total                                                                                    407.67              (403.24)




168
Bank’s network : List of Centres
as on 31 MarCh, 2012
State/UT         Centre                   State/UT    Centre               State/UT   Centre
Andaman &        Diglipur                             Muthukur                        Goalpara
Nicobar UT       Port Blair                           Nalgonda                        Golaghat
Andhra Pradesh   Adilabad                             Nandyal                         Guwahati
                 Adoni                                Narasaraopet                    Jorhat
                 Alamuru                              Nellore                         Karimganj
                 Alwal                                Nizamabad                       Khanapara
                 Anakapalle                           Nuzvid                          Kokrajhar
                 Anantapur                            Ongole                          Mangaldoi
                 Bapatla                              P L Puram                       Morigaon
                 Bibinagar                            Paidiparru                      Nagaon
                 Bobilli                              Patancheru                      Nalbari
                 Chevella                             Peddapalli                      Noonmati
                 Chillakallu                          Poolapalle                      North Lakhimpur
                 Chinnamiram                          Proddatur                       Sibsagar
                 Chirala                              Quthbullapur                    Silchar
                 Chittoor                             Rajahmundry                     Tezpur
                 Dharmavaram                          Rajam                           Tinsukia
                 Edarapalli                           Rajampet             Bihar      Arrah
                 Eluru                                Ramagundam                      Aurangabad
                 Gachibowli                           Repalle                         Begusarai
                 Gajuwaka                             Sangareddy                      Bettiah
                 Gopalapatnam                         Sathupally                      Bhabhua
                 Gudivada                             Serilingampally                 Bhagalpur
                 Guntur                               Shamshabad                      Biharsharif
                 Hindupur                             Siddipeta                       Chapra
                 Hyderabad                            Srikakulam                      Darbhanga
                 Hyderabad (Rangareddy)               Tadepalligudem                  Gaya
                 Jangareddigudem                      Tadpatri                        Gopalganj
                 Kadapa                               Tenali
                                                                                      Hajipur
                 Kakinada                             Tirupati
                                                                                      Katihar
                 Kamareddy                            Uppal Kalan
                                                                                      Kishanganj
                 Karimnagar                           Vijayawada
                                                                                      Madhubani
                 Kasibugga                            Visakhapatnam
                                                                                      Motihari
                 Khammam                              Vizianagaram
                                                                                      Munger
                 Kompally                             Warangal
                                                                                      Muzaffarpur
                 Kukatpally                           Zahirabad
                                                                                      Naugachhia
                 Kurnool                  Arunachal
                                                      Itanagar                        Patna
                 L B Nagar                Pradesh
                 Machilipatnam            Assam       Barpeta Road                    Purnia
                 Mahabubabad                          Biswanath Chariali              Saharsa
                 Mahbubnagar                          Bongaigaon                      Samastipur
                 Malkajgiri                           Dhubri                          Sasaram
                 Mancherial                           Dibrugarh                       Sitamarhi
                 Miryalguda                           Duliajan                        Siwan




                                                                                                        169
State/UT       Centre         State/UT   Centre            State/UT   Centre
Chandigarh UT Chandigarh                 Bharuch                      Mundra
               Manimajra                 Bhavnagar                    Nadiad
Chattisgarh    Abhanpur                  Bhuj                         Naranpar
               Akaltara                  Bopal                        Navagam
               Ambikapur                 Borsad                       Navsari
               Basin                     Botad                        Paddhari
               Bhatapara                 Chandlodiya                  Padra
               Bhilai                    Changodar                    Palanpur
               Bilaspur                  Chhatral                     Patan
               Champa                    Chikhli                      Pipavav
               Chandkuri                 Dahej                        Porbandar
               Dhamtari                  Dahod                        Radhanpur
               Dongargarh                Deesa                        Rajkot
               Durg                      Devgad Baria                 Rajpipla
               Jagdalpur                 Dhoraji                      Rajula
               Jairam Nagar              Dhrangadhra                  Rapar
               Jashpurnagar              Dhrol                        Sanand
               Jhilmila                  Dwarka                       Sihor
               Kawardha                  Gadhada                      Sokhda
               Korba                     Gandhidham                   Surat
               Mahasamund                Gandhinagar                  Surendranagar
               Manendragarh              Gariadhar                    Talaja
               Raigarh                   Godhra                       Tarasadi
               Raipur                    Gondal                       Tathithaiya
               Rajim                     Halol                        Udalpur
               Rajnandgaon               Harij                        Udhna
               Sakti                     Himatnagar                   Umbergaon
               Urla                      Ichchapore                   Unjha
Dadra & Nagar Silvassa                   Idar                         Vadodara
UT                                       Jambusar                     Vallabh Vidyanagar
Daman & Diu UT Daman                     Jamjodhpur                   Valsad
               Diu                       Jamnagar                     Vapi
Delhi          Delhi                     Jasdan                       Vastrapur
Goa            Agaciam                   Jetpur-Navagadh              Vega
               Candolim                  Junagadh                     Vejalpur
               Mapusa                    Kalavad                      Veraval
               Margao                    Kalol                        Visavadar
               Panaji                    Keshod                       Visnagar
               Ponda                     Khambalia                    Vyara
               Vasco                     Kodinar                      Wada
Gujarat        Ahmedabad                 Lathi                        Wankaner
               Amreli                    Madhapar          Haryana    Ambala
               Anand                     Mahuva                       Bahadurgarh
               Ankleshwar                Manavadar                    Basdhara
               Asura                     Mehsana                      Bhiwani
               Atul                      Metoda                       Bhiwani Khera
               Bagasara                  Modasa                       Cheeka
               Bardoli                   Morbi                        Chhapra



170
State/UT    Centre        State/UT    Centre           State/UT   Centre
            Faridabad                 Jamshedpur                  Saidapur
            Fatehabad                 Kodarma                     Sandur
            Garnala                   Ramgarh                     Sedam
            Gurgaon                   Ranchi                      Shahpur
            Hissar        Karnataka   Athni                       Shimoga
            Jakhal                    Bagalkot                    Sindhnur
            Jhajjar                   Bangalore                   Sirsi
            Jind                      Basavakalyan                Siruguppa
            Kaithal                   Belgaum                     Tiptur
            Kalka                     Bellary                     Tumkur
            Kalpi                     Bidadi                      Udupi
            Karnal                    Bidar                       Yadgir
            Kundli                    Bijapur          Kerala     Adoor
            Kurukshetra               Chamarajanagar              Alappuzha
            Manesar                   Chickmagalur                Aluva
            Mirzapur                  Chikodi                     Angamaly
            Narnaul                   Chintamani                  Attingal
            Narwana                   Chitradurga                 Calicut (Kozhikode)
            Palwal                    Davangere                   Changanasseri
            Panchkula                 Devadurga                   Irinjalakuda
            Panipat                   Devanahalli                 Kalamaserry
            Ratia                     Dod Ballapur                Kannur
            Rewari                    Gadag                       Kasargod
            Rohtak                    Gangawati                   Kazhakuttam
            Sadaura                   Gokak                       Kochi
            Safidon                   Gulbarga                    Kollam
            Sirsa                     Hassan                      Kottakkal
            Sonipat                   Haveri                      Kottarakkara
            Tohana                    Hoskote                     Kottayam
            Yamunanagar               Hospet                      Malappuram
Himachal    Baddi                     Hubli-Dharwad               Manjeri
Pradesh     Shimla                    Jamkhandi                   Mavelikkara
            Solan                     Karwar                      Palai
            Una                       Kolar                       Palakkad
Jammu &     Jammu                     Kollegal                    Pathanamthitta
Kashmir     Leh                       Koppal                      Payyannur
            Srinagar                  Kundapura                   Perinthalmanna
            Udhampur                  Kushalnagar                 Perumbavoor
Jharkhand   Bokaro                    Kushtagi                    Sulthanbathery
            Chaibasa                  Mandya                      Thalassery
            Daltonganj                Mangalore                   Thiruvananthapuram
            Deoghar                   Manvi                       Thodupuzha
            Dhanbad                   Marlanhalli                 Thrikkakara
            Dumka                     Mysore                      Thrippunithura
            Gamaria                   Nelamangala                 Thrissur
            Giridih                   Puttur                      Tirur
            Gumia                     Raichur                     Tiruvalla
            Hazaribagh                Ranibennur                  Vadakara



                                                                                  171
State/UT       Centre           State/UT      Centre          State/UT   Centre
Madhya Pradesh Alirajpur                      Sheopur                    Kolhapur
                Ashok Nagar                   Shivpuri                   Lasalgaon
                Balaghat                      Sidhi                      Latur
                Barwani                       Singrauli                  Malegaon
                Beetul                        Tikamgarh                  Mira-Bhayander
                Bhind                         Ujjain                     Miraj
                Bhopal                        Vidisha                    Mumbai
                Bina                          Waidhan                    Murbad
                Burhanpur       Maharashtra   Ahmednagar                 Nagpur
                Chhatarpur                    Akluj                      Nalasopara
                Chhindwara                    Akola                      Nanded
                Damoh                         Alibag                     Nandurbar
                Datia                         Ambernath                  Nashik
                Dewas                         Amravati                   Navi Mumbai
                Dhar                          Aurangabad                 Navi Mumbai (Raigad)
                Gawli Palasia                 Badlapur                   Osmanabad
                Guna                          Baramati                   Pandharpur
                Gwalior                       Barshi                     Panvel
                Harda                         Beed                       Paratwada
                Hoshangabad                   Bhandara                   Parbhani
                Indore                        Bhigwan                    Pen
                Itarsi                        Bhiwandi                   Phaltan
                Jabalpur                      Bhusawal                   Pimpalgaon
                Jhabua                        Boisar                     Pimpri Chinchwad
                Kalapipal                     Buldhana                   Pune
                Katni                         Chakan                     Rahuri-Khurd
                Khandwa                       Chalisgaon                 Ratnagiri
                Khargone                      Chandrapur                 Sangamner
                Lasudia Mori                  Chiplun                    Sangli
                Maihar                        Devalali                   Satara
                Mandsaur                      Dhule                      Shikrapur
                Morena                        Dindori                    Shirdi
                Narsimhapur                   Dombivali                  Shrirampur
                Neemuch                       Ghoti                      Solapur
                Pipariya                      Gondia                     Tasgaon
                Pithampur                     Hingangaht                 Thane
                Raisen                        Hingna                     Tuljapur
                Rajgarh                       Hingoli                    Ulhasnagar
                Ratlam                        Hinjewadi                  Vasai
                Rewa                          Ichalkaranji               Virar
                Sagar                         Islampur                   Wai
                Satna                         Jalgaon
                                                                         Waluj
                Sehore                        Jalna
                                                                         Wardha
                Sendhwa                       Kagal
                                                                         Washim
                Seoni                         Kalyan
                                                                         Yavatmal
                Shahdol                       Karad
                                                                         Yevla
                Shahpura                      Khamgaon
                                                                         Yewat
                Shajapur                      Khed-Shivapur



 172
State/UT    Centre                 State/UT       Centre              State/UT    Centre
Manipur     Imphal (Imphal East)                  Rayagada                        Jalandhar
            Imphal (Imphal West)                  Rourkela                        Jhabal Kalan
Meghalaya   Jowai                                 Sambalpur                       Kapurthala
            Shillong                              Sonepur                         Kartarpur
            Tura                                  Sundargarh                      Khadaur Sahib
Mizoram     Aizawl                                Talcher                         Khanna
Nagaland    Dimapur                               Titlagarh                       Kotkapura
            Kohima                 Pondicherry UT Karaikal                        Lambra
            Mokokchung                            Pondicherry                     Landran
Orissa      Angul                  Punjab         Abohar                          Ludhiana
            Balasore                              Adampur                         Malerkotla
            Barbil                                Adda Dhaka                      Malout
            Bargarh                               Ajnala                          Mansa
            Baripada                              Amloh                           Miani Khas
            Berhampur                             Amritsar                        Moga
            Bhadrak                               Bagha Purana                    Mohali
            Bhanjanagar                           Banga                           Mukerian
            Bhawanipatna                          Barnala                         Muktsar
            Bhubaneswar                           Batala                          Multania
            Bolangir                              Bathinda                        Mundian Kalan
            Chandanpur                            Begowal                         Nabha
            Chandikhole                           Bhogpur                         Nakodar
            Cuttack                               Bikhiwind                       Nawanshahr
            Deogarh                               Budhlada                        Pathankot
            Dhamraport                            Chau Majra                      Patiala
            Dhenkanal                             Chogawan                        Patti
            Dumuduma                              Dasuya                          Phagwara
            Gunupur                               Dera Baba Nanak                 Phillaur
            Jagatpur                              Derabassi                       Phullanwala
            Jagatsinghpur                         Devigarh                        Qadian
            Jajpur                                Dhariwal                        Rajpura
            Jaleswar                              Dhilwan                         Ramasara
            Jatni                                 Dhuri                           Rayya
            Jeypore                               Dinanagar                       Rupnagar
            Jharsuguda                            Faridkot                        Samana
            Kendrapara                            Fatehgarh Churian               Sangrur
            Keonjhar                              Fatehgarh Sahib                 Shahkot
            Khordha                               Fazilka                         Sri Hargobindpur
            Nabrangpur                            Ferozepur                       Sudhar
            Nawapara (Nuapada)                    Gardhiwala                      Sultanpur Lodhi
            Nayagarh                              Garhshankar                     Tarn Taran
            Nimapara                              Gehri Mandi                     Threeke
            Paradip                               Gill Patti                      Urmar Tanda
            Parlakhemundi                         Gobindgarh          Rajasthan   Abu Road
            Phulbani                              Goraya                          Ajmer
            Puri                                  Gurdaspur                       Alwar
            Rairangpur                            Hoshiarpur                      Balotra
            Rajgangpur                            Jagraon                         Bandikui



                                                                                                     173
State/UT   Centre           State/UT     Centre            State/UT   Centre
           Banswara                      Pipar City                   Karamadai
           Baran                         Rajgarh                      Karumathampatti
           Barmer                        Ramgarh                      Karur
           Bayana                        Rawatbhata                   Kelambakkam
           Behror                        Rawatsar                     Kethaiurambu
           Bhadra                        Reengus                      Korattur
           Bharatpur                     Sangaria                     Kulumur
           Bhilwara                      Sardarshahar                 Kumbakonam
           Bhiwadi                       Sawai Madhopur               Labbaikudikadu
           Bikaner                       Sikar                        Lalgudi
           Bilara                        Sri Madhopur                 M Vadipatti
           Bundi                         Tijara                       Madurai
           Chirawa                       Tonk                         Maduranthakam
           Chittaurgarh                  Udaipur                      Mallasamudram
           Churu            Sikkim       Gangtok                      Manachanallur
           Dausa                         Namchi                       Manapparai
           Deeg                          Rangpo                       Mayiladuthurai
           Didwana          Tamil Nadu   Alandur                      Mecheri
           Dungarpur                     Ambattur                     Medavakkam
           Ganganagar                    Ammapettai                   Merpanaikadu
           Hanumangarh                   Anaikudam                    Mettunasuvampalayam
           Jaipur                        Anthiyur                     Mettupalayam
           Jalore                        Appakudal                    Mettur
           Jhalawar                      Aranthangi                   Mullipuram
           Jhunjhunu                     Arni                         Musiri
           Jodhpur                       Attur                        Muthuservamadam
           Khairthal                     Avadi                        Nagapattinam
           Khandela                      Ayothiapatinam               Nagercoil
           Khatoo Shyamji                Bodhupatty                   Nallikaundanpalayam
           Kherli                        Chengalpattu                 Nasiyanur
           Kishangarh Bas                Chennai                      Omalur
           Kota                          Chidambaram                  Ooty
           Lachhmangarh                  Coimbatore                   Oriyur
           Lalsot                        Cuddalore                    Palladam
           Losal                         Cumbum                       Pallavaram
           Mahwa                         Dharmapuri                   Paramkudi
           Mandawa                       Dindigul                     Pattukottai
           Merta City                    Edanganasalai                Perambalur
           Mukandgarh                    Edappadi                     Periasemur
           Nadbai                        Eraiyur                      Perungudi
           Nagar                         Erode                        Pollachi
           Nagaur                        Hosur                        Poonamallee
           Neem-Ka-Thana                 Ilanji                       Porur
           Nohar                         Irungattukottai              Pudukkottai
           Pali                          Kallakkurichi                Rajapalayam
           Phalodi                       Kancheepuram                 Ramanathapuram
           Pilani                        Kangeyam                     Rasipuram
           Pilibanga                     Karaikudi                    Salem



174
State/UT        Centre            State/UT   Centre            State/UT      Centre
                Sankari                      Barabanki                       Saharanpur
                Sarkarsamakulam              Bareilly                        Sambhal
                Sathyamangalam               Basti                           Shahjahanpur
                Selaiyur                     Bhadohi                         Sirsaganj
                Sirugamani                   Bijnor                          Sitapur
                Sivakasi                     Bulandshahr                     Sultanpur
                Srirangam                    Chandausi                       Unnao
                Taramangalam                 Deoria                          Varanasi
                Thanjavur                    Dhampur                         Vrindavan
                Theni                        Etah              Uttarakhand   Bazpur
                Thirukalambur                Etawah                          Dehradun
                Thirukarungudi               Faizabad                        Haridwar
                Thiruvallur                  Farrukhabad                     Kashipur
                Thiruvarur                   Fatehpur                        Mussoorie
                Thiruvottiyur                Firozabad                       Pandri
                Thondamuthur                 Gajraula                        Rishikesh
                Thoraipakkam                 Ghaziabad                       Roorkee
                Thuraiyur                    Ghazipur                        Rudrapur
                Tiruchengode                 Gonda                           Talli Haldwani
                Tiruchirapalli               Gorakhpur         West Bengal   Alipurduar
                Tirunelveli                  Hapur                           Amtala
                Tirupur                      Hardoi                          Andul
                Tiruttani                    Hathras                         Arambagh
                Tiruvannamalai               Jaunpur                         Asansol
                Tuticorin                    Jhansi                          Bagnan
                Varanavasi                   Kannauj                         Baharampur
                Vazhapadi                    Kanpur                          Baidyabati
                Veerapatti                   Khatauli                        Bally
                Vellakoil                    Khurja                          Balurghat
                Vellore                      Kosikalan                       Bankura
                Vembarpatti                  Lakhimpur-Kheri                 Baranagar
                Villupuram                   Lucknow                         Barasat
                Virudhunagar                 Maharajganj                     Barrackpore
Tripura         Agartala                     Mainpuri                        Baruipur
                Dharmanagar                  Mathura                         Basirhat
                Udaipur                      Maunath Bhanjan                 Belghoria
Uttar Pradesh   Agra                         Meerut                          Binnaguri
                Aligarh                      Mirzapur                        Bolpur
                Allahabad                    Moradabad                       Bongaon
                Amroha                       Muzaffarnagar                   Boral
                Aonla                        Najibabad                       Burdwan
                Azamgarh                     Noida                           Chandernagore
                Badaun                       Padrauna                        Chinsurah
                Baghpat                      Palia Kalan                     Contai
                Baheri                       Pilibhit                        Dakshineswar
                Bahraich                     Pratapgarh                      Dalkhola
                Ballia                       Rae Bareli                      Dankuni
                Balrampur                    Rampur



                                                                                              175
State/UT   Centre            State/UT   Centre            State/UT      Centre
           Darjeeling                   Konnagar                        Rampurhat
           Diamond Harbour              Krishnanagar                    Ranaghat
           Domjur                       Madhyamgram                     Raniganj
           Dum Dum                      Mahestala                       Rishra
           Durgapur                     Malda                           Sainthia
           Fulia                        Medinipur                       Salt Lake
           Guskara                      Memari                          Serampore
           Habra                        Nabadwip                        Sheoraphuli
           Haldia                       Nabapally                       Shyamnagar
           Howrah                       Naihati                         Siliguri
           Jaigaon                      Narendrapur                     Singur
           Jalpaiguri                   New Barrackpore                 Suri
           Kalimpong                    New Garia                       Tamluk
           Kalna                        Nimta                           Tarakeswar
           Kalyani                      Panagarh                        Uttarpara
           Kanchrapara                  Panihati          Grand Total   1050
           Kandi                        Panskura          Overseas      Singapore
           Katwa                        Puruliya                        Hong Kong
           Kharagpur                    Raghunathganj                   Dubai
           Khardaha                     Raiganj                         Shanghai
           Koch Bihar                   Rajarhat                        Abu Dhabi
           Kolkata                      Rajpur-Sonarpur                 Colombo




176
At Axis Bank, the Green Banking journey started last year. Since then, we have made
steady progress in our endeavour to save the planet. And in doing so, successfully
brought the entire Axis Bank family together in their efforts to reduce our impact on
the environment.


Just a few of the initiatives that continue to make a big difference -


• We have made Axis House a no-plastic zone


• Our Car-pooling initiative is a sustained effort to reduce our carbon footprints


• The dry waste collected at Axis House is being recycled to manufacture
  bio-degradable and eco-friendly bags and notepads


• We have seen considerable movement towards e-formats in our account and
  credit card statements, welcome letters, demat statements and loan payment
  schedules


• 61% of all shareholders received their half-yearly and annual reports via e-mail


• We moved to e-greetings instead of the normal paper greetings sent earlier


• Password generation, duplicate password and duplicate pin generation for our
  Internet Banking Customers and Debit Card customers has been changed to an
  online process


Our investment in three small, convenient and extremely effective measures of
Reduce, Reuse and Recycle continues to pay rich dividends by ensuring that we
leave a healthier planet for generations to come.
www.sapprints.com
                                           Eighteenth Annual Report 2011-12

                                             AXIS BANK LIMITED
                                                        NOTICE
NOTICE is hereby given that the Eighteenth Annual General Meeting of the members of Axis Bank Limited will be held
on Friday, the 22nd June, 2012 at 10.00 a.m. at J. B. Auditorium, Ahmedabad Management Association, AMA Complex,
ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad 380 015 to transact the following business:
ORDINARY BUSINESS:
1.   To receive, consider and adopt the Balance Sheet as at 31st March, 2012, Profit & Loss Account and Cash flow
     statement for the year ended 31st March, 2012 and the reports of Directors and Auditors thereon.
2.   To appoint a Director in place of Smt. Rama Bijapurkar, who retires by rotation and, being eligible, offers herself for
     re-appointment as a Director.
3. To appoint a Director in place of Shri V. R. Kaundinya, who retires by rotation and, being eligible, offers himself for
   re-appointment as a Director.
4.   To declare a dividend on the Equity Shares of the Bank.
5.   To consider and pass with or without modifications, the following resolution as a Special Resolution:
     “RESOLVED THAT pursuant to the provisions of Section 224A and other applicable provisions, if any, of the
     Companies Act, 1956 and the Banking Regulation Act, 1949, M/s. Deloitte Haskins & Sells, Chartered Accountants,
     Ahmedabad, ICAI Registration Number 117365W, be and are hereby appointed as the Statutory Auditors of the Bank
     to hold office from the conclusion of the Eighteenth Annual General Meeting until the conclusion of the Nineteenth
     Annual General Meeting, on such remuneration as may be approved by the Audit Committee of the Board.”
SPECIAL BUSINESS:
6.   To consider and pass with or without modifications, the following resolution, as an Ordinary Resolution:
     “RESOLVED THAT Prof. Samir K. Barua, who was appointed as an Additional Director at the meeting of the Board of
     Directors held on 22nd July, 2011 and who holds office as such upto the date of this Annual General Meeting and in
     respect of whom notice under Section 257 of the Companies Act, 1956 has been received from a member signifying
     his intention to propose Prof. Samir K. Barua as a candidate for the office of Director of the Bank is hereby appointed
     as a Director of the Bank, liable to retire by rotation.”
7.   To consider and pass with or without modifications, the following resolution, as an Ordinary Resolution:
     “RESOLVED THAT Shri A. K. Dasgupta, who was appointed as an Additional Director at the meeting of the Board
     of Directors held on 5th September, 2011 and who holds office as such upto the date of this Annual General Meeting
     and in respect of whom notice under Section 257 of the Companies Act, 1956 has been received from a member
     signifying his intention to propose Shri A. K. Dasgupta as a candidate for the office of Director of the Bank is hereby
     appointed as a Director of the Bank, liable to retire by rotation.”
8.   To consider and pass with or without modifications, the following resolution, as an Ordinary Resolution:
     “RESOLVED THAT Shri Som Mittal, who was appointed as an Additional Director at the meeting of the Board of
     Directors held on 22nd October, 2011 and who holds office as such upto the date of this Annual General Meeting
     and in respect of whom notice under Section 257 of the Companies Act, 1956 has been received from a member
     signifying his intention to propose Shri Som Mittal as a candidate for the office of Director of the Bank is hereby
     appointed as a Director of the Bank, liable to retire by rotation.”
9.   To consider and pass with or without modifications, the following resolution, as an Ordinary Resolution:
     “RESOLVED THAT subject to the applicable provisions of the Companies Act, 1956 and the Banking Regulation Act,
     1949 and subject to the provisions of the Articles of Association of the Bank, approval of the members of the Bank


                                                                                                                               1
                                        Eighteenth Annual Report 2011-12

    is hereby given for re-appointment of Smt. Shikha Sharma as the Managing Director & CEO of the Bank for a period
    of 3 years effective 1st June, 2012.”
    “RESOLVED FURTHER THAT subject to the approval by the Reserve Bank of India, Smt. Shikha Sharma be paid
    remuneration by way of salary, allowances and perquisites as Managing Director & CEO of the Bank as per the
    following terms and conditions with effect from 1st June, 2012:
    Salary                             : `1,78,20,000 p.a.
    Leave Fare Concession              : `11,15,000 p.a.
    Perquisites
    Upkeep allowance (for Bank’s
    owned/leased accommodation)        : NIL
    Utility Bills                      : To be reimbursed at actual upto a limit of `3,00,000 p.a.
    Furnishing Allowance               : At actual upto a limit of `16 lacs once in a period of 3 years.
    Provident Fund                     : 12% of basic pay with equal contribution by the Bank or as may be decided
                                         upon by the Board/Trustees from time to time.
    Gratuity                           : One month’s salary for each completed year of service or part thereof.
    Superannuation                     : 10% of basic pay p.a.
    Travelling Allowance               : As per Bank’s Policy.
    Medical benefits                   : (i)   Group mediclaim facility as available to other employees of the Bank.
                                          (ii) Reimbursement of full medical expenses for self and family.
    Club fees                          : Membership of two clubs (excluding life membership fees). All official
                                         expenses in connection with such membership incurred would be reimbursed
                                         by the Bank.
    House Rent Allowance
    (in lieu of Bank’s owned/leased
    accommodation)                     : `59,52,000 p.a.
    Conveyance & Telephone             : Free use of Bank’s car with driver and telephone facilities.
    Personal Insurance                 : Shall be covered under the Group Savings Linked Insurance Scheme (GSLI)
                                         and the Personal Accident Policy as per the Bank’s rules.
    Newspapers & Periodicals           : As per requirement.
    Leave                              : As per the Bank’s rules.
    Entertainment                      : Expenditure on official entertainment would be on the Bank’s account.
    Stock Options                      : As may be decided by the HR and Remuneration Committee/Board from time
                                         to time, subject to approval of Reserve Bank of India.
    Variable Pay                       : As may be decided by the HR and Remuneration Committee/Board from time
                                         to time subject to approval of Reserve Bank of India.
    Loans                              : Loan facilities at existing limits, at the rate of interest applicable to other
                                         employees.
    Other terms                        : As per the Bank’s Staff Rules and as may be agreed by the Board, from time
                                         to time.
    “RESOLVED FURTHER THAT the Board of Directors of the Bank is hereby authorised to do all such acts, deeds and
    things and to execute any document or instruments etc. as may be required to give effect to this resolution.”



2
                                          Eighteenth Annual Report 2011-12

    “RESOLVED FURTHER THAT the Company Secretary of the Bank is hereby authorised to file necessary forms with
    the Registrar of Companies/other Regulatory Authorities under his signature and to take all further action in the
    matter including signing of any other applications, deeds, documents, forms, certificates, as may be necessary under
    the provisions of the Companies Act, 1956 and the Banking Regulation Act, 1949.”
10. To consider and pass with or without modifications, the following resolution, as an Ordinary Resolution:
    “RESOLVED THAT subject to approval by the Reserve Bank of India and such other statutory authorities as may be
    required, approval of the members of the Bank is hereby given for revising the remuneration payable to Dr. Adarsh
    Kishore, Chairman of the Bank as under:
    a.   Expenses for office maintenance be increased to `100,000 per month from `75,000 per month with effect from
         1st April, 2011 and thereafter be increased to ` 125,000 per month with effect from 1st April, 2012.
    b.   All other terms and conditions to remain unchanged.”
11. To consider and pass with or without modifications, the following resolution as an Ordinary Resolution:
    “RESOLVED THAT Shri Somnath Sengupta, in respect of whom notice under Section 257 of the Companies Act,
    1956 has been received from a member signifying his intention to propose Shri Somnath Sengupta as a candidate
    for the office of Director of the Bank is hereby appointed as a Director of the Bank, not liable to retire by rotation,
    effective from the date from which his appointment as Whole-time Director will be approved by Reserve Bank of India
    till 31st May, 2015, the last day of the month in which he reaches the age of superannuation.”
12. To consider and pass with or without modifications, the following resolution as an Ordinary Resolution:
    “RESOLVED THAT subject to the applicable provisions of the Companies Act, 1956 and the Banking Regulation Act,
    1949 and subject to the provisions of the Articles of Association of the Bank, approval of the members of the Bank
    is hereby given for appointment of Shri Somnath Sengupta as the Whole-time Director of the Bank effective from
    the date from which his appointment as Whole-time Director will be approved by Reserve Bank of India till 31st May,
    2015, the last day of the month in which he reaches the age of superannuation”.
    “RESOLVED FURTHER THAT subject to the approval by the Reserve Bank of India, Shri Somnath Sengupta be paid
    remuneration by way of salary, allowances and perquisites as Whole-time Director of the Bank as per the following
    terms and conditions effective from the date from which his appointment as Whole-time Director will be approved
    by Reserve Bank of India:
    Salary                               : `1,11,48,000 p.a.
    Leave Fare Concession                : `5,00,000 p.a.
    Perquisites
    House Rent Allowance                 : `26,88,000 p.a. (in lieu of accommodation provided by the Bank).
    Residence                            : Leased accommodation to be provided by the Bank.
    Provident Fund                       : 12% of basic pay with equal contribution by the Bank or as may be decided
                                           upon by the Board/Trustees from time to time.
    Gratuity                             : One month’s salary for each completed year of service or part thereof (on
                                           pro-rata basis).
    Superannuation                       : 10% of Basic Pay p.a.
    Travelling Allowance                 : As per Bank’s Policy.
    Medical Benefits                     : (i)   Group mediclaim facility as available to other employees of the Bank.
                                            (ii) Reimbursement of full medical expenses for self and family.
    Club Fees                            : Membership of one club (excluding life membership fees). All official expenses
                                           in connection with such membership incurred would be reimbursed by the
                                           Bank.


                                                                                                                              3
                                              Eighteenth Annual Report 2011-12

        Conveyance & Telephone               : Free use of the Bank’s car with a Driver and telephone facilities.
        Personal Insurance                   : Shall be covered under the Group Savings Linked Insurance Scheme (GSLI)
                                               and the Group Term Life Insurance Policy as per the Bank’s policy.
        Newspapers & periodicals             : As per requirements.
        Entertainment                        : Expenditure on official entertainment would be on the Bank’s account.
        Utility Bills                        : At actuals upto a limit of `1,20,000 p.a.
        Furnishing Allowance                 : At actuals upto a limit of `10 lacs during his tenure as Whole-time Director.
        Leave                                : As per the Bank’s rules.
        Employees Stock Options (ESOP)       : As may be decided by the HR and Remuneration Committee/ Board from time
                                               to time, subject to approval of Reserve Bank of India.
        Variable Pay                         : As may be decided by the HR and Remuneration Committee/Board, subject
                                               to approval of the Reserve Bank of India.
        Loans                                : Loan facilities at existing limits, at the rate of interest applicable to other
                                               employees.
        Other terms                          : As per the Bank’s Staff Rules and as may be agreed by the Board, from time
                                               to time.
        “RESOLVED FURTHER THAT the Board of Directors of the Bank is hereby authorised to do all such acts, deeds and
        things and to execute any document or instruments etc. as may be required to give effect to this resolution.”
        “RESOLVED FURTHER THAT the Company Secretary of the Bank is hereby authorised to file necessary forms with
        the Registrar of Companies/other Regulatory Authorities under his signature and to take all further action in the
        matter including signing of any other applications, deeds, documents, forms, certificates, as may be necessary under
        the provisions of the Companies Act, 1956 and the Banking Regulation Act, 1949.”
    13. To consider and pass with or without modifications, the following resolution as an Ordinary Resolution:
        “RESOLVED THAT Shri V. Srinivasan, in respect of whom notice under Section 257 of the Companies Act, 1956 has
        been received from a member signifying his intention to propose Shri V. Srinivasan as a candidate for the office of
        Director of the Bank is hereby appointed as a Director of the Bank, not liable to retire by rotation, effective from the
        date from which his appointment as Whole-time Director will be approved by Reserve Bank of India.”
    14. To consider and pass with or without modifications, the following resolution as an Ordinary Resolution:
        “RESOLVED THAT subject to the applicable provisions of the Companies Act, 1956 and the Banking Regulation Act,
        1949 and subject to the provisions of the Articles of Association of the Bank, approval of the members of the Bank
        is hereby given for appointment of Shri V. Srinivasan as the Whole-time Director of the Bank for a period of 3 years
        effective from the date from which his appointment as Whole-time Director will be approved by Reserve Bank of
        India.”
        “RESOLVED FURTHER THAT subject to the approval by the Reserve Bank of India, Shri V. Srinivasan be paid
        remuneration by way of salary, allowances and perquisites as Whole-time Director of the Bank as per the following
        terms and conditions effective from the date from which his appointment as Whole-time Director will be approved
        by Reserve Bank of India:
        Salary                               : `1,25,70,600 p.a.
        Leave Fare Concession                : `5,00,000 p.a.
        Perquisites
        House Rent Allowance                 : `26,88,000 p.a. (in lieu of accommodation provided by the Bank).
        Residence                            : Leased accommodation to be provided by the Bank.



4
                                        Eighteenth Annual Report 2011-12

   Provident Fund                      : 12% of basic pay with equal contribution by the Bank or as may be decided
                                         upon by the Board/Trustees from time to time.
   Gratuity                            : One month’s salary for each completed year of service or part thereof (on
                                         pro-rata basis).
   Superannuation                      : 10% of Basic Pay p.a.
   Travelling Allowance                : As per Bank’s policy.
   Medical Benefits                    : (i)   Group mediclaim facility as available to other employees of the Bank.
                                          (ii) Reimbursement of full medical expenses for self and family.
   Club Fees                           : Membership of one club (excluding life membership fees). All official expenses
                                         in connection with such membership incurred would be reimbursed by the
                                         Bank.
   Conveyance & Telephone              : Free use of the Bank’s car with a Driver and telephone facilities.
   Personal Insurance                  : Shall be covered under the Group Savings Linked Insurance Scheme (GSLI)
                                         and the Group Term Life Insurance Policy as per the Bank’s policy.
   Newspapers & periodicals            : As per requirements.
   Entertainment                       : Expenditure on official entertainment would be on the Bank’s account.
   Utility Bills                       : At actuals upto a limit of `1,20,000 p.a.
   Furnishing Allowance                : At actuals upto a limit of `10 lacs during his tenure as Whole-time Director.
   Leave                               : As per the Bank’s rules.
   Employees Stock Options (ESOP)      : As may be decided by the HR and Remuneration Committee/ Board from time
                                         to time, subject to approval of Reserve Bank of India.
   Variable Pay                        : As may be decided by the HR and Remuneration Committee/Board, subject
                                         to approval of the Reserve Bank of India.
   Loans                               : Loan facilities at existing limits, at the rate of interest applicable to other
                                         employees.
   Other terms                         : As per the Bank’s Staff Rules and as may be agreed by the Board, from time
                                         to time.
   “RESOLVED FURTHER THAT the Board of Directors of the Bank is hereby authorised to do all such acts, deeds and
   things and to execute any document or instruments etc. as may be required to give effect to this resolution.”
   “RESOLVED FURTHER THAT the Company Secretary of the Bank is hereby authorised to file necessary forms with
   the Registrar of Companies/other Regulatory Authorities under his signature and to take all further action in the
   matter including signing of any other applications, deeds, documents, forms, certificates, as may be necessary under
   the provisions of the Companies Act, 1956 and the Banking Regulation Act, 1949.”


Place : Mumbai                                                                        By order of the Board
Date : 17th May, 2012
                                                                                      P. J. Oza
                                                                                      Company Secretary &
                                                                                      Senior Vice President (Law)




                                                                                                                           5
                                                Eighteenth Annual Report 2011-12

    Notes:
    1.   A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO
         ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. PROXIES IN ORDER TO
         BE VALID AND EFFECTIVE MUST BE DELIVERED AT THE REGISTERED OFFICE OF THE BANK NOT LATER THAN
         FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
    2.   The relevant explanatory statement pursuant to the provisions of Section 173(2) of the Companies Act, 1956 in
         respect of item Nos. 5 to 14, is annexed hereto.
    3.   The Register of Members and the Share Transfer Books of the Bank will remain closed from Saturday, the 16th day of
         June, 2012 to Friday, the 22nd day of June, 2012 (both days inclusive).
    4.   The Dividend would be paid to the shareholders whose names stand on the Register of Members on the close of
         business hours of 15th June, 2012. ECS credit/dispatch of the dividend warrants would commence on 23rd June, 2012
         and is expected to be completed on or before 2nd July, 2012.
    5.   a)   The Bank is arranging to print the details of your Bank Account on the dividend warrants thereby ensuring that
              the proceeds of the dividend warrants are credited to your account. We therefore request you to send to our
              Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited, Hyderabad or to the Registered
              Office of the Bank, the following particulars so as to reach them on or before 15th June, 2012.
    	    	    •	   Name	of	the	Bank,	Branch	and	Place	with	PIN	code	No.,	where	the	account	is	maintained.	
    	    	    •	   Bank	Account	No.	
         b)   The Bank has also decided to offer the facility of ECS/NECS in centres wherever available. The ECS Mandate Form
              is annexed. This facility could also be used by the shareholders instead of the Bank Mandate System, for receiving
              the credit of dividends.
    6.   Shareholders may now avail of the Nomination Facility under Section 109A of the Companies Act, 1956. The relevant
         Nomination Form is annexed.
    7.   Shareholders seeking any information with regard to accounts are requested to write to the Bank at an early date to
         enable the Management to keep the information ready.
    8.   SEBI has made it mandatory for every participant in the securities/capital market to furnish the details of Income tax
         Permanent Account Number (PAN). Accordingly, all the shareholders holding shares in physical form are requested to
         submit their details of PAN along with a photocopy of both sides of the PAN card, duly attested, to the Registrar and
         Share Transfer Agents of the Bank.
    9.   The Ministry of Corporate Affairs (MCA) has launched a “Green Initiatives in the Corporate Governance” by allowing
         paperless compliances by the companies. MCA has issued circulars stating that the services of a notice/document by
         a company to its shareholders can now be made through electronic mode. In view of the above, the Annual Report
         (Audited Financial Statements, Directors Report, Auditors Report etc.) is being sent to the shareholders in electronic
         form to the email address registered with their Depository Participant (in case of electronic shareholding)/the Bank’s
         Registrar and Share Transfer Agents (in case of physical shareholding).
         We, therefore request and encourage you to register your email ID in the records of your Depository Participant
         (in case of electronic holding)/the Bank’s Registrar and Share Transfer Agents (in case of physical shareholding)
         mentioning your folio no./demat account details.
         However, in case you wish to receive the above shareholder communication in paper form, you may write to the
         Bank’s Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited, Unit: Axis Bank Limited,
         Plot No. 17 to 24, Vithalrao Nagar, Madhapur, Hyderabad – 500 081, or send an email at axisgogreen@karvy.com
         mentioning your folio no./demat account details.




6
                                            Eighteenth Annual Report 2011-12

    The Shareholders are requested to write to the Company Secretary or to the Registrar and Share Transfer Agent
    regarding transfer of shares and for resolving grievances at the below address.
    The Company Secretary
    Axis Bank Limited
    Registered Office : ‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006.
    Email: p.oza@axisbank.com or rajendra.swaminarayan@axisbank.com
    M/s. Karvy Computershare Private Limited
    Unit: Axis Bank Limited
    Plot No. 17 to 24, Vithalrao Nagar, Madhapur, Hyderabad – 500 081.
    Phone No. 040-23420815 to 23420824
    Fax No. 040-23420814
    Email: einward.ris@karvy.com
    Contact Persons: Shri V. K. Jayaraman, GM (RIS)/Ms. Varalakshmi, Sr. Manager (RIS)
10. Information regarding Directors retiring by rotation:
    i)    Smt. Rama Bijapurkar has an Honours Degree in Science and a Post Graduate Diploma in Management from the
          Indian Institute of Management, Ahmedabad. She is an Independent Management Consultant, specialising in
          market strategy. She has 30 years of experience in market research and market strategy and serves or has served
          on the boards of several of India’s leading companies. As on 31st March, 2012, she is the Chairperson of HR and
          Remuneration Committee and member of Nomination Committee and Acquisitions, Divestments and Mergers
          Committee of the Bank’s Board. She does not hold any equity share of the Bank.
    ii)   Shri V. R. Kaundinya is a Graduate in Agriculture from AP Agricultural University, Hyderabad. He also holds
          PGDM with specialization in Agriculture from Indian Institute of Management, Ahmedabad. Shri Kaundinya has
          been working in the field of agriculture since 1979. His work includes dealing with the farmers, scientists, policy
          makers, input industry, trade and other stakeholders who are involved in agriculture in India and abroad. He has
          specifically worked in the areas of crop protection, seeds, other agronomic practices and farmers economics.
          He was a member of the Dr. Swaminathan Committee to develop the Biotech Policy in India. He held various
          leadership positions in industry associations like the Indian Crop Protection Association, Association of Seed
          Industry and All India Crop Biotech Association. He is currently the Chairman of the Agriculture Group in the
          Association of Biotech Led Enterprises (ABLE). He has developed case studies and took Agricultural Marketing
          and Rural Developments classes at various management institutes including IIM, Ahmedabad. As on 31st March,
          2012, he is member of Audit Committee, Nomination Committee, Special Committee of the Board of Directors
          for Monitoring of Large Value Frauds and Acquisitions, Divestments and Mergers Committee of the Bank’s
          Board. He does not hold any equity share of the Bank.


Place : Mumbai                                                                             By order of the Board
Date : 17th May, 2012
                                                                                           P. J. Oza
                                                                                           Company Secretary &
                                                                                           Senior Vice President (Law)




                                                                                                                                7
                                               Eighteenth Annual Report 2011-12

                                                 ANNEXURE TO NOTICE
                          EXPLANATORY STATEMENT U/S 173(2) OF THE COMPANIES ACT, 1956
    Item No. 5:
    Section 224A of the Companies Act, 1956 provides that in case of companies in which not less than 25 percent of
    the subscribed share capital is held, whether singly or in combination, by public financial institutions, banks, insurance
    companies, Government companies, Central Government or State Government(s), the appointment of an Auditor of
    the Company shall be made by a Special Resolution. The Administrator of the Specified Undertaking of the Unit Trust of
    India (erstwhile Unit Trust of India), Life Insurance Corporation of India, General Insurance Corporation and its erstwhile
    subsidiaries, constitute public financial institutions in terms of Section 4A of the Companies Act, 1956, and hold more
    than 25 percent of the subscribed equity share capital of the Bank. Hence, a Special Resolution is proposed for the
    appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Bank’s Statutory Auditors to hold office from
    the conclusion of this meeting upto the conclusion of the next Annual General Meeting.
    As required, M/s. Deloitte Haskins & Sells have forwarded a certificate to the Bank stating that their appointment, if made,
    will be within the limit specified in Sub-Section (1B) of Section 224 of the Companies Act, 1956.
    The Directors recommend the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Statutory
    Auditors of the Bank.
    None of the Directors is in any way concerned with or interested in the resolution at Item No. 5 of the Notice.
    Item No. 6:
    Prof. Samir K. Barua was appointed as an Additional Director of the Bank w.e.f. 22nd July, 2011. Under Section 260 of
    the Companies Act, 1956, read with Article 91 of the Articles of Association of the Bank, he continues to hold office as
    a Director until the conclusion of the ensuing Annual General Meeting. However, as required under Section 257 of the
    Companies Act, 1956, the Bank has received a notice from a member signifying his intention to propose Prof. Barua as
    a candidate for the office of Director of the Bank and the requisite deposit of `500 has also been received by the Bank
    along with such notice. It is proposed that Prof. Barua will be liable to retire by rotation. He does not hold any equity
    share of the Bank.
    Prof. Samir K. Barua has a Master’s degree in technology from the Indian Institute of Technology, Kanpur and a Doctorate
    in management (Fellow Programme in Management) from the Indian Institute of Management, Ahmedabad. He has
    been on the faculty of Indian Institute of Management, Ahmedabad, for the past 30 years and having held various
    administrative positions, is currently, the Director of Indian Institute of Management, Ahmedabad. Prof. Barua brings
    considerable expertise in financial markets and risk management. He is an independent director on the board of corporates
    such as Bharat Petroleum Corporation Limited, STCI Finance Limited, Coal India Limited, Torrent Power Limited and IOT
    Infrastructure and Energy Services Limited.
    As on 31st March, 2012, Prof. Barua is a member of Audit Committee, Risk Management Committee and Customer
    Service Committee.
    The Directors recommend approval of the resolution.
    Except for Prof. Samir K. Barua, no other Director of the Bank is in any way concerned with or interested in the resolution
    at Item No. 6 of the Notice.
    Item No. 7:
    Shri A. K. Dasgupta, Nominee of LIC, was appointed as an Additional Director of the Bank w.e.f. 5th September, 2011.
    Under Section 260 of the Companies Act, 1956, read with Article 91 of the Articles of Association of the Bank, he
    continues to hold office as a Director until the conclusion of the ensuing Annual General Meeting. However, as required
    under Section 257 of the Companies Act, 1956, the Bank has received a notice from a member signifying his intention
    to propose Shri Dasgupta as a candidate for the office of Director of the Bank and the requisite deposit of `500 has also
    been received by the Bank along with such notice. It is proposed that Shri Dasgupta will be liable to retire by rotation. He
    does not hold any equity share of the Bank.
    Shri A. K. Dasgupta is B.Sc. (Hons.) and has done Diploma in Personnel Management & Labour Welfare from Punjab
    University and is a Licentiate from Federation of Insurance Institute. Shri A. K. Dasgupta, took charge as the Managing
    Director of Life Insurance Corporation of India on 3rd April, 2007. Apart from being associated with many organizational


8
                                            Eighteenth Annual Report 2011-12

development programmes in LIC, he was also involved in introducing many new initiatives. He was associated with many
initiatives taken by the Corporation to meet the challenges of the future. He retired from the services of LIC with effect
from 31st January, 2012. He is also a Director on the board of corporates such as ABB Limited and Grasim Industries
Limited.
The Directors recommend approval of the resolution.
Except for Shri A. K. Dasgupta, no other Director of the Bank is in any way concerned with or interested in the resolution
at Item No. 7 of the Notice.
Item No. 8:
Shri Som Mittal was appointed as an Additional Director of the Bank w.e.f. 22nd October, 2011. Under Section 260 of
the Companies Act, 1956, read with Article 91 of the Articles of Association of the Bank, he continues to hold office as
a Director until the conclusion of the ensuing Annual General Meeting. However, as required under Section 257 of the
Companies Act, 1956, the Bank has received a notice from a member signifying his intention to propose Shri Mittal as
a candidate for the office of Director of the Bank and the requisite deposit of `500 has also been received by the Bank
along with such notice. It is proposed that Shri Mittal will be liable to retire by rotation. He does not hold any equity share
of the Bank.
Shri Som Mittal is President of NASSCOM, the premier trade body for the IT-BPO Industry in India. Shri Mittal has more
than 23 years of experience in IT industry and has handled both domestic and international operations and is familiar with
leveraging of technology in Corporations. He has worked with Wipro for 5 years from 1989-1994 as Chief Executive of
their PC Server and Services Division. From 1994-1999 he was MD of Digital Equipment India Ltd., a company engaged in
providing Technology Solutions to Corporations including Banks and Financial Institutions. During 1999-2006 he was the
M.D. for Digital Global Soft (HP subsidiary), a software services company providing global solutions. From 2006-2007, he
was Senior Vice President, Asia Pacific and Japan, in HP.
As on 31st March, 2012, Shri Som Mittal is the Chairman of the IT Strategy Committee of the Board.
The Directors recommend approval of the resolution.
Except for Shri Som Mittal, no other Director of the Bank is in any way concerned with or interested in the resolution at
Item No. 8 of the Notice.
Item No. 9:
The Board of Directors at their meeting held on 1st June, 2009 had appointed Smt. Shikha Sharma as the Managing
Director & CEO for a period of three years with effect from 1st June, 2009. The term of Smt. Shikha Sharma will therefore
end on 31st May, 2012. In view of the above, the HR and Remuneration Committee considered the re-appointment
of Smt. Shikha Sharma and had recommended her re-appointment for a further period of three years effective
1st June, 2012. The Board of Directors at their meeting held on 13th February, 2012 also approved her re-appointment
for a further period of three years effective 1st June, 2012. The Bank had made an application to Reserve Bank of India
for its approval to the above re-appointment which has been approved vide RBI letter dated 10th May, 2012. Further, the
Board at its meeting held on 27th April, 2012 approved the revised compensation payable to Smt. Shikha Sharma effective
1st June, 2012. The Bank will approach RBI for its approval for payment of revised compensation.
During the tenure of Smt. Shikha Sharma, the Bank has shown all-round progress in terms of business growth, profitability,
branch expansion, ATM network expansion and improved brand equity. Total deposits have increased from `1,17,374
crores at 31st March, 2009 to `2,20,104 crores at 31st March, 2012. Total advances have also increased from `81,557
crores at 31st March, 2009 to `169,760 crores at 31st March, 2012. Net profit of the Bank for the year ended 31st March,
2012 was `4,242 crores, as against `1,815 crores for the year ended 31st March, 2009. The branch network (branches
and extension counters) of the Bank increased from 792 at 31st March, 2009 to 1,622 at 31st March, 2012.
Smt. Shikha Sharma has done her B.A. (Hons.) in Economics and completed her PGDBM from the Indian Institute of
Management, Ahmedabad in 1980. She has a Post Graduate Diploma in Software Technology, from the National Centre
for Software Technology, Mumbai.
Smt. Sharma began her career with the ICICI group where she has worked across various verticals like Project Finance,
Retail Banking and Investment Banking. Her last assignment was as Managing Director & CEO of ICICI Prudential Life
Insurance Company, a leading life insurance company in the private sector.




                                                                                                                                  9
                                                Eighteenth Annual Report 2011-12

     Smt. Sharma’s achievements in the financial sector have received wide recognition. She is a recipient of many business
     awards notably; ‘Transformational Business Leader of the Year’ at AIMA’s Managing India Awards - 2012, ‘Woman Leader
     of the year’ at Bloomberg-UTV Financial Leadership Awards - 2012. She has also been listed in prominent publications
     such as Forbes List of Asia’s 50 Power Business Women - 2012, Indian Express Most Powerful Indians - 2012, India Today
     Power List of 25 Most Influential Women - 2012.
     As on 31st March, 2012, Smt. Sharma is Chairperson of the Special Committee of the Board of Directors for Monitoring
     of Large Value Frauds and Committee of Whole-time Directors. She is also a member of the Committee of Directors,
     Risk Management Committee, Customer Service Committee, Acquisitions, Divestments and Mergers Committee and IT
     Strategy Committee. She is the Chairperson of Axis Asset Management Company Limited and Axis U.K. Limited and also
     a Director of Axis Private Equity Limited, the subsidiaries of the Bank. She holds 15,000 equity shares of the Bank allotted
     to her under ESOP scheme of the Bank.
     The Directors recommend approval of the resolution.
     Except for Smt. Shikha Sharma, no other Director of the Bank is in any way concerned with or interested in the resolution
     at Item No. 9 of the Notice.
     Item No. 10:
     Dr. Adarsh Kishore was appointed as the Chairman of the Bank for a period of three years from 8th March, 2010. The
     Board of Directors of the Bank at its meeting held on 22nd April, 2011 had approved the revision in remuneration and
     increase in the reimbursement of expenses for office maintenance to Dr. Adarsh Kishore with effect from 1st April, 2011
     from `75,000 per month to `1,00,000 per month. Shareholders approval to the revision in remuneration was obtained
     by way of an ordinary resolution at the Annual General Meeting of the Bank held on 17th June, 2011. The Reserve Bank
     of India has approved revision in remuneration and increase in reimbursement of expenses for office maintenance to Dr.
     Adarsh Kishore from `75,000 to `1,00,000 per month effective 1st April, 2011. It is now proposed to obtain shareholders
     approval for reimbursement of expenses for office maintenance to Dr. Adarsh Kishore upto `1,00,000 per month with
     effect from 1st April, 2011.
     During the year ended 31st March, 2012, the Bank has grown and progressed under the guidance of Dr. Adarsh Kishore.
     In view of this, the HR and Remuneration Committee of the Board, which met on 20th April, 2012, examined the
     remuneration of Dr. Adarsh Kishore, in comparison with the remuneration of the Chairmen of the other peer group
     banks and recommended a revision in the reimbursement of expenses for office maintenance to `125,000 per month to
     Dr. Adarsh Kishore. The Board of Directors of the Bank at its meeting held on 17th May, 2012 has approved the above
     revision to Dr. Adarsh Kishore with effect from 1st April, 2012.
     The Directors recommend approval of the resolution.
     Except for Dr. Adarsh Kishore, no other Director of the Bank is in any way concerned with or interested in the resolution
     at Item No. 10 of the Notice.
     Item Nos. 11 and 12:
     The Board of Directors at its meeting held on 27th April, 2012 approved the proposal for appointment of Shri Somnath
     Sengupta as a whole-time Director of the Bank effective from the date from which his appointment as Whole-time
     Director will be approved by Reserve Bank of India till 31st May, 2015, the last day of the month in which he reaches the
     age of superannuation. The Bank has received a notice under Section 257 of the Companies Act, 1956, from a member
     signifying his intention to propose Shri Somnath Sengupta as a candidate for the office of Director of the Bank and the
     requisite deposit of `500 has also been received by the Bank along with such notice. It is proposed that Shri Somnath
     Sengupta will not be liable to retire by rotation.
     Shri Somnath Sengupta has a degree in Economics Honours from the University of Delhi. He has over 35 years of banking
     experience including nearly 20 years with the State Bank group. He joined the Bank in 1996. He has all-round experience
     in banking operations with extensive experience in foreign exchange and treasury operations. Shri Somnath Sengupta has
     headed the finance function since 2003 and has been the Executive Director & CFO of the Bank w.e.f. 1st October, 2009.
     Shri Somnath Sengupta is a director of Axis U.K. Limited, the subsidiary of the Bank. He is a member of Committee of
     Directors and Audit & Compliance Committee of Axis U.K. Limited. He holds 46,707 equity shares of the Bank allotted to
     him under ESOP scheme of the Bank.




10
                                           Eighteenth Annual Report 2011-12

The Directors recommend approval of the resolutions.
No Director of the Bank is in any way concerned with or interested in the resolutions at Item Nos. 11 and 12 of the Notice.
Item Nos. 13 and 14:
The Board of Directors at its meeting held on 27th April, 2012 approved the proposal for appointment of Shri V. Srinivasan
as a whole-time Director of the Bank for a period of three years effective from the date from which his appointment as
Whole-time Director will be approved by Reserve Bank of India. The Bank has received a notice under Section 257 of the
Companies Act, 1956, from a member signifying his intention to propose Shri V. Srinivasan as a candidate for the office
of Director of the Bank and the requisite deposit of `500 has also been received by the Bank along with such notice. It is
proposed that Shri V. Srinivasan will not be liable to retire by rotation.
Shri V. Srinivasan is a qualified engineer from the College of Engineering, Anna University, Chennai and completed his
PGDBM from the Indian Institute of Management, Calcutta in 1990. He began his career in the financial services industry
with ICICI Ltd., in its Merchant Banking Division, in 1990. He was a part of the start-up team of ICICI Securities and
Finance Co. Ltd (I-Sec), the joint venture between ICICI and J.P. Morgan and headed the Fixed Income business there.
Since 1999, Shri V. Srinivasan was working with J.P. Morgan, India and in his last assignment he was their Managing
Director and Head of Markets. He was CEO of J.P. Morgan Chase Bank, Mumbai Branch as well as Chairman, J.P. Morgan
Securities (I) Pvt. Ltd. at the time he left J.P. Morgan. He has served on various RBI Committees such as the Technical
Advisory Committee of RBI, Committee of Repos, STRIPS etc. He has also served as a Chairman of FIMMDA, the key self-
regulatory body for bond and money markets and PDAI, the self-regulatory organization for Primary Dealers. He joined
the Bank in September, 2009 as the Executive Director (Corporate Banking).
Shri V. Srinivasan is Chairman of Axis Trustee Services Limited and a director in Axis U.K. Limited, the subsidiaries of the
Bank. He is Chairman of Human Resources, Remuneration & Nomination Committee and member of Committee of
Directors and Risk Management Committee of Axis U.K. Limited. He does not hold any equity share of the Bank.
The Directors recommend approval of the resolutions.
No Director of the Bank is in any way concerned with or interested in the resolutions at Item Nos. 13 and 14 of the Notice.


Place : Mumbai                                                                            By order of the Board
Date : 17th May, 2012
                                                                                          P. J. Oza
                                                                                          Company Secretary &
                                                                                          Senior Vice President (Law)




                                                                                                                               11
www.sapprints.com
                                               Eighteenth Annual Report 2011-12

                                                   AXIS BANK LIMITED
       Registered Office: Trishul, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006


                                                     PROXY FORM

I/We, ____________________________________________________________________________________, of ___________________

in the district of ___________________________________ being a member/members of Axis Bank Limited hereby appoint

Shri/Smt. _________________________________________________________________________________ of _____________________

in the district of __________________________ or failing him Shri/Smt. _____________________________________________________

of ___________________________ in the district of __________________________________________ as my/our proxy to attend and
vote for me/us/our behalf at the 18th Annual General Meeting of the Bank to be held on Friday, the 22nd June, 2012
at 10.00 a.m. at J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg,
Ahmedabad 380 015 and at any adjournment thereof.


Signed this ______ day of ____________, 2012


Signature                 :   __________________________________________________________________               Affix
Address                   :   __________________________________________________________________             15 Paise
                                                                                                             Revenue
                          :   __________________________________________________________________              Stamp

Folio No./CL ID/DP ID No. :   ____________________________________ No. of Shares held : _____________________________

N.B. : 1. The Proxy need not be a member.
       2. The Proxy Form duly signed and stamped should reach the Bank’s Registered Office at least 48 hours before the time of
          Meeting.


                                                  ATTENDANCE SLIP
             PLEASE BRING THIS ATTENDANCE SLIP TO THE MEETING HALL AND HAND IT OVER AT THE ENTRANCE

I/We hereby record my/our presence at the 18th Annual General Meeting of Axis Bank Limited held at J. B. Auditorium,
Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad 380 015 on Friday, the
22nd June, 2012 at 10.00 a.m.


Name of the Shareholder                   :    _________________________________________________________________

Ledger Folio No./CL ID/DP ID No.          :    _________________________________________________________________

Number of shares held                     :    _________________________________________________________________

Name of the Proxy/Representative, if any :     _________________________________________________________________

Signature of the Member/s/Proxy           : _________________________________________________________________

Signature of the Representative           : _________________________________________________________________

                                                     AXIS BANK LIMITED
       Registered Office: Trishul, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006.
                                                               NOMINATION FORM
                                                                     FORM 2B
                                                             (See rules 4CCC and 5D)
                                           (To be filled in by individual(s) applying singly or jointly)

I/We ____________________________________________________________________________________________________________ and

_________________________________________________________________________________________________________________ and

______________________________________________________________________________________ the holders of shares bearing
numbers of Axis Bank Limited wish to make a nomination and do hereby nominate the following person(s) in whom all rights of transfer
and/or amount payable in respect of shares shall vest in the event of my or our death.

Name(s) and Address(s) of Nominee(s)                          :   ____________________________________________________________________

Folio No.                                                     :   ____________________________________________________________________

Address                                                       :   ____________________________________________________________________

                                                                  ____________________________________________________________________

                                                                  ____________________________________________________________________

Date of Birth*                                                :   ____________________________________________________________________

*(To be furnished in case the nominee is a minor)
**The Nominee is minor whose guardian is

Name         : ________________________________________________________________________________________________________

Address      : ________________________________________________________________________________________________________

                 ________________________________________________________________________________________________________
(**To be deleted if not applicable)

Signature : 1. _________________________________ 2. _________________________________ 3. _______________________________

Name         : 1. _________________________________ 2. _________________________________ 3. _______________________________

Address      : ________________________________________________________________________________________________________

                 ________________________________________________________________________________________________________

Date         : _________ / ________ /2012

Address, Name and Signature of witness :

___________________________________________________________                           _____________________________________________________
(Name and Address)                                                                    Signature with Date

1. ___________________________________________________________ 1. ___________________________________________________

2. ___________________________________________________________ 2. ___________________________________________________

Instructions :
1.     The Nomination can be made by individuals only applying/holding shares on their own behalf singly or jointly. Non-individual including society, trust,
       body corporate, partnership firm, Karta of HUF, holder of power of attorney cannot nominate. If the shares are held jointly, all joint holders will sign
       the nomination form. Space is provided as a specimen, if there are more joint holders more sheets can be added for signatures of holders of shares and
       witness.
2.     A minor can be nominated by a holder of shares and in that event the name and address of the Guardian shall be given by the holder.
3.     The nominee shall not be a trust, society, body corporate, partnership firm, Karta of HUF, or a power of attorney holder. A non-resident Indian can be
       a nominee on re-patriable basis.
4.     Nomination stands rescinded upon transfer of shares.
5.     Transfer of shares in favour of a nominee shall be a valid discharge by a Company against the legal heir.
6.     The intimation regarding Nomination/Nomination form shall be filed in duplicate with Company/Registrar and Share Transfer Agents of the Company
       who will return one copy thereof to the shareholder.
                                             Eighteenth Annual Report 2011-12

                                               ECS MANDATE FORM

To                                                             FOR SHARES HELD IN PHYSICAL MODE
M/s. Karvy Computershare Private Limited                       Please complete this form and send it to
Unit : Axis Bank Limited                                       M/s. Karvy Computershare Private Limited, Hyderabad
Plot No. 17 to 24, Vithalrao Nagar
Madhapur, Hyderabad - 500 081                                  SHAREHOLDERS HOLDING SHARES IN DEMAT MODE
                                                               should inform their DPs directly


I hereby consent to have the amount of dividend on my equity shares credited through the National Electronic Clearing
Service (Credit Clearing) - (NECS). The particulars are:

1.   Folio No.                          ________________________________________________________________________________

2.   Name of 1st Registered holder      ________________________________________________________________________________

3.   Bank Details :                     ________________________________________________________________________________

	    •	   Name	of	Bank	                 ________________________________________________________________________________

	    •	   Full	address	of	the	Branch	   ________________________________________________________________________________

	    •	   Account	Number	               ________________________________________________________________________________

	    •		 Bank	Ledger	No.	               ________________________________________________________________________________

	    •	   Account	Type	:	(Please	tick	the	relevant	box	for	Savings	Bank	Account,	Current	Account	or	Cash	Credit	A/c)


                      10 - Savings                         11 -Current                           12 - Cash Credit

	    •	   9	Digit	Code	number	of	the	Bank	and	branch	appearing	on	the	MICR	cheque	issued	by	the	Bank	(Please	attach	a	
          photocopy of a cheque for verifying the accuracy of the code number):




I hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of incomplete
or incorrect information, I will not hold the Company responsible.


                                                                 (Signature of the 1st Registered holder as per
                                                                 the specimen signature with the Company)


                                                                 Name     : _________________________________________


                                                                 Address : _________________________________________

                                                                            _________________________________________

Date : _______ / _______ /2012                                              _________________________________________

								
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